We came across a bullish thesis on Impinj, Inc. (PI) on Twitter by RadnorCapital. In this article, we will summarize the bulls’ thesis on PI. Impinj, Inc. (PI)’s share was trading at $136.52 as of Jan 15th. PI’s trailing and forward P/E were 148.39 and 55.87 respectively according to Yahoo Finance.
A scientist in a lab examining a prototype RF chip for broadband radio transceiver front ends.
Impinj (PI), with a market cap of ~$4.5 billion, represents a compelling open-ended growth opportunity in the nascent RFID market, where it holds a leadership position. Impinj is poised to benefit from the rapid adoption of a connected world, driven by RAIN RFID technology, which connects items to the Internet of Things (IoT). In 2023, only 0.4% of connectable items, or 44 billion, were RAIN-connected, highlighting immense runway for growth. Core verticals like retail, logistics, and general merchandise are embracing this technology to optimize inventory management, sales floor replenishment, shipment verification, omnichannel fulfillment, loss prevention, and automated checkout, with future applications expanding to pharmaceuticals, auto parts, and food and drink. Key customers include Walmart, UPS, and Inditex, while companies like Uniqlo already use Impinj-powered self-checkout solutions.
The business model benefits from both integrated circuits (chips, ~80% of revenue) and systems (readers, ~15%), with a licensing fee (~5%) from primary competitor NXP Semiconductor, underscoring its technological edge. Impinj’s proprietary technology, fabricated by TSMC, positions it as the only player with a complete product platform on both ends of the radio frequency spectrum. Although pricing has declined slightly over the years, Impinj has consistently expanded gross margins through cost efficiencies and innovations, ensuring continued adoption without sacrificing profitability. The company’s strategy to stimulate demand, coupled with high-volume growth at a 29% CAGR since 2010, supports its long-term growth trajectory.
Risks include limited customer visibility due to channel partnerships, which can introduce volatility. However, direct engagement with customers to develop long-term plans around RAIN technology mitigates this concern. The valuation is another factor to monitor, as the stock trades at ~30x 2026 EBITDA estimates, though this could prove conservative given the potential for 20-30% annual revenue growth and significant operating leverage. The market’s infancy and Impinj’s ability to compound revenue over an extended period are key drivers of its appeal. With a low capital intensity (~5% of revenue) and a clean balance sheet, robust free cash flow generation is expected to sustain growth.
Management continues to impress with its execution and focus on long-term value creation. Impinj’s market position, strong IP, and ability to scale in a rapidly growing industry make it an attractive investment, offering significant upside potential as the company capitalizes on the vast untapped opportunities in IoT.
Impinj, Inc. (PI) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 22 hedge fund portfolios held PI at the end of the third quarter which was 29 in the previous quarter. While we acknowledge the risk and potential of PI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.