Pacific Crest’s Brad Erickson noted that IMPINJ Inc PI was trading at a premium to peers, although this premium was warranted given the company’s “faster growth, strong exposure to secular tailwinds and a stable ramp to profitability.”
Erickson maintains an Overweight rating on the company, while raising the price target from $24 to $29.
Off To A Good Start
“Tag IC strength, health care momentum and improving software traction are all possible upside drivers and make our model look conservative. That is what’s called getting off to a good start,” the analyst mentioned.
The beat and raise quarter reported by Impinj suggests retailers are investing in RFID to address omnichannel needs and the company is benefiting from this.
The company reported its revenue, gross margin and EPS for Q2 ahead of expectations, while issuing its Q3 revenue guidance well ahead of the estimate.
Impinj also raised its full-year tag IC volume guidance from 4.3 billion–4.5 billion to 4.9 billion–5.1 billion.
Upside To Continue
“Consistent with our checks, we believe that retailers have significant runway to deepen RFID deployments, which continues to drive strong tailwinds for Impinj. We think this was likely the largest contributor to the guidance raise,” Erickson stated.
The analyst also pointed out that the company was using some of its upside to aggressively invest in its business, although profitability has been coming along better than expected.
The revenue estimates for 2016 and 2017 have been raised, reflecting higher tag IC volume expectations.
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