Should you bet on Impinj (NASDAQ:PI) stock?

Shares of radio frequency identification technology leader Impinj (NASDAQ: IP) are on an uptrend, rising more than 44% in one month. This growth includes the 29% jump in PI stock on Thursday, following the strong third quarter performance (third quarter EPS of $0.34 was well above the Street expectations are $0.17). Going forward, strong demand trends and an improvement in supply will significantly boost PI’s finances. However, the recent rally indicates that the upside may remain capped.

Impinj CEO Chris Diorio said third-quarter demand for its integrated circuit (IC) “exceeded supply by more than 50% for the sixth consecutive quarter, and we expect demand to exceed the offer until 2023”.

Given the massive demand, any improvement in the supply situation could provide a significant boost to its finances and bookings.

In response to Impinj’s performance in the third quarter, the Needham analyst James Ricchiuti said, “With another strong quarter of beat and rally, PI makes a compelling case for the leveraged earnings story that the bulls were anticipating.”

The analyst added, “We view PI as a unique growth story, particularly in the current macro environment. The RAIN RFID (Radio Frequency Identification) market remains underpenetrated, paving the way for stronger growth once supply catches up to demand.

What is the prediction for Impinj Stock?

While analysts are bullish on Impinj shares, the recent rally limits the upside. PI stock received six unanimous buy recommendations for a consensus strong buy rating. However, the analysts’ average price target of $112.67 implies a marginal decline of around 2.3%.

Data from TipRanks shows that hedge funds and insiders have reduced their holdings of PI stocks. Hedge funds sold 96.9,000 PI shares in three months. Meanwhile, insiders sold Impinj shares worth $135,000. He has a Neutral smart score of five on TipRanks.

Conclusion

Strong demand and optimistic management outlook make PI stocks an attractive investment. However, supply issues and the recent surge in PI stocks may limit the short-term upside.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.