Shares of RFID manufacturer Impinj (PI, Financial) jumped 10.76% in the morning session after the S&P Dow Jones Indices announced that the company would be added to the S&P SmallCap 600 index before the opening of trading on Monday, September 23, 2024. The stock is currently priced at $173.60.
Being included in the index means that Impinj (PI, Financial) will likely be held by many mutual funds and ETFs, potentially driving up demand for the stock. This addition to the index often garners increased visibility and trading volume, which is reflected in today's significant price movement.
Impinj Inc operates a platform that enables wireless connectivity to everyday items by delivering each item's identity, location, and authenticity to business and consumer applications. Their robust platform comprises endpoint integrated circuits (ICs) and a connectivity layer that includes readers, gateways, and reader ICs, all of which operate via RAIN RFID technology.
On the financial front, Impinj (PI, Financial) has a market capitalization of $4.88 billion. Despite a high Price-to-Earnings (P/E) ratio of 598.62, the company's Altman Z-Score stands strong at 7.74, indicating a lower risk of bankruptcy. Furthermore, the Beneish M-Score of -4.16 suggests that the company is unlikely to be a manipulator of financial statements.
However, there are some red flags. Impinj (PI, Financial) has accumulated medium warning signs such as a declining revenue per share over the past 12 months and a stock price close to its 10-year high. Additionally, the company shows severe warning signs like a Sloan Ratio indicating poor quality of earnings and rapid asset growth compared to revenue growth, suggesting decreasing efficiency.
Despite these concerns, the stock's inclusion in the S&P SmallCap 600 index adds a layer of optimism. The GF Value for Impinj (PI, Financial) is estimated at $107.80, suggesting that the stock may be significantly overvalued at its current price. For detailed analysis, you can refer to the GF Value page.
In terms of growth metrics, Impinj has shown a positive trend with a 30.3% increase in revenue over the past three years. Moreover, their operational efficiency is improving with an expanding operating margin. However, the company still presents a high risk profile due to its significant volatility and insider selling activities.
As Impinj (PI, Financial) gears up for its addition to the S&P SmallCap 600 index, investors should weigh the potential for increased demand against the existing financial risks and high valuation.
