On Thursday, Needham increased the price target on Impinj Inc (NASDAQ:PI) shares to $195 from $160 while maintaining a Buy rating on the stock.
The firm's decision follows observations of a rebound in demand within the RFID market, particularly noting improvements in the retail apparel sector, expansion in general merchandise tagging volumes, and continued deployments in high-profile logistics applications.
The company's revenue guidance for the second quarter suggests a 17% increase in the first half of 2024 compared to the second half of 2023, excluding the NXP (NASDAQ:NXPI) license payment expected in Q2. This growth is attributed to the aforementioned market drivers.
However, there is some uncertainty about the extent of the recovery in the retail apparel market, leading to projections of a more conservative low double-digit growth rate for the second half of 2024 compared to the first half.
Despite this caution, Needham expresses confidence in Impinj's potential for significant growth in the coming years. The firm anticipates that the company could achieve over 20% growth in both 2025 and 2026. This optimism is based on the continued adoption of RAIN RFID technology across existing and new enterprise use cases.
The analyst's commentary underscores the positive outlook for Impinj, citing the company's ability to capitalize on the expanding use of RFID technology. The adoption of RAIN RFID is expected to drive Impinj's growth as it continues to serve a variety of markets and applications.
InvestingPro Insights
As Impinj Inc (NASDAQ:PI) continues to navigate the RFID market with a positive outlook from Needham, real-time data from InvestingPro further enriches the analysis of the company's performance and potential. The company's market capitalization stands at $4.85 billion, indicating a significant presence in the sector. Despite a high Price / Book ratio of 56.41 as of Q1 2024, which suggests a premium valuation, Impinj has shown a strong return over the last month, with a price total return of 44.06%, and an even more impressive three-month return of 70.29%. This momentum is echoed by the substantial six-month price total return of 120.1%, underscoring the company's robust performance in the market.
InvestingPro Tips highlight that Impinj's net income is expected to grow this year, with six analysts having revised their earnings upwards for the upcoming period. Moreover, with liquid assets surpassing short-term obligations, the company operates with a moderate level of debt, indicating a solid financial structure that can support future growth. For readers interested in a deeper dive into Impinj's financials and market performance, there are additional InvestingPro Tips available, providing a comprehensive analysis of the company's prospects. Utilize the coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, and unlock further insights that could guide your investment decisions.
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