Impinj, Inc.

PI Details

A Look at 3QFY20 Key Financial Highlights: Impinj, Inc.  (NASDAQ: PI) is a leading provider of RAIN RFID solutions focused on delivering information about everyday products to the digital world, thereby enabling the Internet of Things. During the September 2020 quarter, the company reported revenues of $28.2 million and a GAAP net loss of $14.3 million. Revenues were down from $40.8 million reported in the year-ago period. Adjusted EBITDA loss for the quarter came in at $6.2 million. The company had spent $11.9 million on research and development activities. The company results were impacted by the COVID-19 led pandemic. The company exited the quarter with a cash balance of $40 million.

3QFY20 Key Financial Highlight (Source: Company Reports)

Outlook: For 4QFY20, the company expects revenues in the range of $26.5 million to $28.5 million. Non-GAAP net loss for the quarter is expected to be between $9.3 million to $7.8 million. Adjusted EBITDA loss is expected to be in the ambit of $8.9 million to $7.4 million. The company has plans to continue investing in research and development activities in order to enhance and extend its platform.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)

EV/Sales Multiple Valuation (Source: Refinitiv, Thomson Reuters)

Note: All the forecasted figures are taken from Thomson Reuters, NTM: Next Twelve Months

Stock Recommendation: As on 22^nd December 2020, the market capitalization of the company stood at $996.42 million. The stock of PI gave a positive return of 63.5% in the past three months and a positive return of 54.1% in the last six months. The stock is trading close to its 52-week high of $44.76. We have valued the stock using an EV/Sales multiple based illustrative relative valuation method and have arrived at a target price with a correction of high single-digit (in % terms). On a technical front, the stock has an immediate support level of ~$38.9 and a resistance level of ~$44.8. Considering the current trading levels, steep price movement in the past months, valuation and Q3FY20 financial performance of the company, we suggest investors to book profit and give a ‘Sell’ rating on the stock at the closing price of $43.16, up by 0.3% on 22 December 2020.

PI Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

CalAmp Corp.

CAMP Details

A Quick Look at CAMP’s 3QFY21 Key Highlights: CalAmp Corp. (NASDAQ: CAMP) is engaged in offering wireless communications products to crucial data, information, and entertainment content. During the September 2020 quarter, the company reported total revenue of $88 million, down from the year-ago figure of $96.6 million, owing to COVID-19 led pandemic. Gross margins for the quarter came in at 39.8%, up 290 basis points on a sequential basis. During the quarter, the company reported an adjusted net income of $2.6 million as compared to a net profit of $4.9 million reported in the year-ago period. In 3QFY21, the company reported an adjusted EBITDA of ~$8.77 million, down from $10.9 million compared to the previous corresponding period. The company ended the period with cash and cash equivalent of $91.7 million, with long-term debt amounting to $180.6 million. Net cash provided by operating activities stood at $24.3 million for the nine months ended November 30, 2020. 

Key Highlights of 3QFY21 Results (Source: Company Reports)

What to Expect: Due to the coronavirus pandemic, the company has suspended the outlook for 4QFY21. However, the company remains focused on cost-reduction efforts. Additionally, the company is taking the necessary steps to curb the impact of COVID-19 on its business, thereby enhancing its customer base and improving profitability.  

Valuation Methodology- P/CF Multiple Based Relative Valuation (Illustrative)

P/CF Based Valuation (Source: Refinitiv, Thomson Reuters)

Note: All forecasted figures and peers have been taken from Thomson Reuters, NTM-Next Twelve Months

Stock Recommendation: The stock of CAMP closed at $9.31 with a market capitalization of ~$326.2 million. The stock made a 52-week low and high of $3.7 and $11.94, respectively, and is currently trading above the average of its 52-week trading range. The stock has delivered a positive return of ~19.5% in the last six months and ~94.8% in the last nine months period. On a technical front, the stock has a support level of ~$7.00 and a resistance level of ~$11.32. We have valued the stock using a P/CF multiple based illustrative relative valuation and have arrived at a target price with a correction of low double-digit (in % terms). Considering the current trading levels, steep price movement in the past months, valuation and COVID-19 led uncertainties along with 3QFY21 results, we suggest investors to book profit and give a ‘Sell’ rating on the stock at the closing price of $9.31, up by 1.09% on 22 December 2020. 

CAMP Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

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