Impinj, Inc. (PI) Hits Fresh High: Is There Still Room to Run?
Shares of Impinj (PI) have been strong performers lately, with the stock up 13.9% over the past month. The stock hit a new 52-week high of $137.13 in the previous session. Impinj has gained 22.2% since the start of the year compared to the -32.2% move for the Zacks Computer and Technology sector and the -24.1% return for the Zacks Electronics - Semiconductors industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 26, 2022, Impinj reported EPS of $0.34 versus consensus estimate of $0.18 while it beat the consensus revenue estimate by 5.57%.
For the current fiscal year, Impinj is expected to post earnings of $1.49 per share on $254.87 million in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $1.88 per share on $321.55 million in revenues. This represents a year-over-year change of 60.22% and 26.16%, respectively.
Impinj may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Impinj has a Value Score of F. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 89.6X current fiscal year EPS estimates, which is a premium to the peer industry average of 17.2X. On a trailing cash flow basis, the stock currently trades at 5X versus its peer group's average of 11.8X. Additionally, the stock has a PEG ratio of 3.58. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Impinj currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Impinj fits the bill. Thus, it seems as though Impinj shares could have a bit more room to run in the near term.
How Does PI Stack Up to the Competition?
Shares of PI have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Infineon Technologies AG (IFNNY). IFNNY has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of B.
Earnings were strong last quarter. Infineon Technologies AG beat our consensus estimate by 5%, and for the current fiscal year, IFNNY is expected to post earnings of $2.27 per share on revenue of $15.88 billion.
Shares of Infineon Technologies AG have gained 10.8% over the past month, and currently trade at a forward P/E of 15.35X and a P/CF of 11.75X.
The Electronics - Semiconductors industry may rank in the bottom 69% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for PI and IFNNY, even beyond their own solid fundamental situation.
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