Canaccord Upgrades IMPINJ After Q1 Report, Projects Long-Term Growth

IMPINJ Inc PI, a maker of radio frequency identification devices and software, reported Monday after the close with better-than-expected first-quarter results and above-consensus second-quarter revenue guidance.

The Analyst

Canaccord Genuity analyst Michael Walkley upgraded IMPINJ from Hold to Buy and increased the price target from $17 to $18.

The Thesis

IMPINJ made progress in Q1, reducing its inventory by hundreds of millions of units versus Canaccord's expectations of a reduction of 500 million to 1 billion units of channel inventory, Walkley said in a Tuesday note.

With the improvement in channel inventory and better-than-anticipated Q2 guidance, Walkley said he expects sequential growth in unit shipments in the next two quarters and a return to year-over-year growth in Q4.

IMPINJ has control of inventory issues and Canaccord forecast improving results going forward, Walkley said.

"We believe the long-term prospects for the RAIN market remain strong and, given our belief channel inventory is improving, we have increased our estimates."

Despite near-term challenges, IMPINJ is focused on developing its end-to-end platform and long-term product development, Walkley said.

"Execution on this road map should enable IMPINJ to offer differentiated products for use across a range of industries supporting longer-term company growth and margins."