Why Impinj Stock Was Plunging Today
Key Points
Impinj reported fourth-quarter results that were mostly in line with estimates.
Management called 2025 a tough year.
Due to weak demand from apparel retailers, the company sees a slight decline in Q1 revenue.
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Shares of Impinj (NASDAQ: PI) were taking a dive after the RAIN RFID (radio-frequency ID) specialist came up slightly short of fourth-quarter estimates slightly and its guidance for the first quarter missed the mark.
As of 12:14 p.m. ET, the stock was down 21.4% on the news.
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What happened with Impinj
Impinj's revenue in the fourth quarter was essentially flat, up 1.4% to $92.8 million, which matched the analyst consensus.
On the bottom line, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) ticked up from $15 million to $16.4 million, and adjusted earnings per share, which excludes $15.2 million in stock-based compensation, was $0.50, up from $0.48 a year ago, and slightly below the consensus at $0.51. On a generally accepted accounting principles (GAAP) basis, the company reported a loss of $1.1 million, and it had a GAAP loss for the year, of $10.8 million.
CEO Chris Diorio called 2025 "a transition year for Impinj," and said it was "a tough year for our industry," citing challenges related to tariffs, inventory reductions, and a declining trend in apparel imports and RFID adoption in general merchandise.
What's next for Impinj
Investors were also disappointed with Impinj's forecast for the first quarter as the Internet of Things company called for revenue of $71 million-$74 million, implying a 2% decline at the midpoint, which was well below the analyst consensus at $90.5 million as the company expects weak apparel retailer demand.
It sees a GAAP net loss of $15.1 million to $16.6 million, and per-share profit of $0.08 to $0.13 on an adjusted basis, much worse than estimates at $0.39.
Wall Street analysts lowered their price targets on the stock, but they largely maintained positive ratings on Impinj.
Impinj's business has historically been volatile so a money-losing year isn't that unusual, but it's reasonable to question the stock's premium valuation as it's unclear how long these headwinds will persist.
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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool recommends Impinj. The Motley Fool has a disclosure policy.
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