Shares of the radio frequency identification technology leader Impinj (NASDAQ:PI) are on an uptrend, rising over 44% in one month. This growth includes the 29% jump in PI stock on Thursday, following the solid Q3 performance (Q3 EPS of $0.34 handily surpassed the Street’s expectations of $0.17). Looking ahead, the strong demand trends and an improvement in supply will significantly boost PI’s financials. However, the recent rally indicates that the upside could remain capped.
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Impinj’s CEO, Chris Diorio, stated that the Q3 demand for its endpoint IC (Integrated Circuit) “exceeded supply by more than 50% for the sixth consecutive quarter, and we expect demand to exceed supply well into 2023.”
Given the massive demand, any improvement in the supply situation could give a significant boost to its financials and bookings.
In response to Impinj’s Q3 performance, Needham analyst James Ricchiuti said, “With yet another strong beat-and-raise quarter, PI is making a compelling case for the earnings leverage story bulls have been anticipating.”
The analyst added, “We regard PI as a unique growth story, particularly in the current macro environment. The RAIN RFID (Radio Frequency Identification) market remains under-penetrated, setting the stage for stronger growth once supply catches up with demand.”
What is the Prediction for Impinj Stock?
While analysts are bullish about Impinj stock, the recent rally limits the upside. PI stock has received six unanimous Buy recommendations for a Strong Buy consensus rating. However, analysts’ average price target of $112.67 implies a marginal downside of about 2.3%.
TipRanks’ data shows that hedge funds and insiders have reduced their holdings in PI stock. Hedge funds sold 96.9K PI stock in three months. Meanwhile, insiders sold Impinj stock worth $135K. It has a Neutral Smart Score of five on TipRanks.
Bottom Line
The strong demand and management’s upbeat outlook make PI stock an attractive investment. However, the supply concerns and the recent spike in PI stock could limit the upside in the near term.
