RFID Traceability And Supply Chain Solutions Will Build Lasting Momentum

Key Takeaways

• Expanding adoption of RFID solutions in food, logistics, and retail drives recurring revenue, market expansion, and supports future outsized growth and stable earnings visibility.
  
• Enhanced platforms and product features enable higher-margin opportunities across new categories, boost competitive position, and facilitate broader enterprise use cases.
  
• Heavy reliance on a few key customers, industry headwinds, and slow new market adoption could threaten growth and increase revenue volatility amid ongoing margin pressures.

Catalysts

Operates a cloud connectivity platform in the Americas, the Asia Pacific, Europe, the Middle East, and Africa.

• Expanding deployment of RFID solutions for food traceability and freshness-especially at the item level driven by pilots with major retailers-presents a multi-year growth opportunity. This trend is underpinned by regulatory and consumer demand for improved traceability and waste reduction, which is already leading to additional pilot programs and is expected to ramp into meaningful unit volumes in 2026 and beyond, supporting outsized future revenue growth.
  
• Broadening adoption of RFID-enabled supply chain and logistics solutions across both dedicated logistics providers and retailers managing their own supply chains, as customers seek greater resiliency and flexibility in response to tariff-related uncertainties and global supply chain pressures. This drives recurring revenue streams from endpoint ICs and opens up additional enterprise use cases, supporting both top-line and more diversified revenue.
  
• M800 and Gen2X platform enhancements, including improved readability, faster inventory counting, and unique enterprise use cases (like loss analytics), are driving higher gross margin product mix and expanding the company's addressable market by enabling new categories such as food, high-value apparel, and hard-to-read items. Sustained adoption of these products bolsters future gross margins and earnings.
  
• Continued growth in reader and gateway deployments-supported by retail and logistics wins and resurgence in autonomous and overhead reading-contributes both to a stronger systems revenue mix and virtuous cycles that pull additional endpoint IC sales, ultimately enhancing both revenue and recurring high-margin streams.
  
• Healthy channel inventory levels, strong ongoing partnerships, and recurring engagement with leading apparel, food, and logistics customers serve to reduce near-term volatility and build long-term earnings visibility, laying the groundwork for improved net margins and more stable earnings growth over time.

Impinj Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Impinj's revenue will grow by 20.6% annually over the next 3 years.
• Analysts assume that profit margins will increase from 0.2% today to 14.5% in 3 years time.
• Analysts expect earnings to reach $91.2 million (and earnings per share of $1.18) by about August 2028, up from $633.0 thousand today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 80.9x on those 2028 earnings, down from 7351.5x today. This future PE is greater than the current PE for the US Semiconductor industry at 28.6x.
• Analysts expect the number of shares outstanding to grow by 3.46% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 10.38%, as per the Simply Wall St company report.

Impinj Future Earnings Per Share Growth

Risks

• The company is facing macro headwinds such as persistent tariff-related uncertainty and volatility, as well as ongoing supply chain disruptions. These external factors could limit growth opportunities or cause revenue volatility, particularly for international expansion or if supply continuity is threatened.
  
• Year-over-year, both total company revenue and endpoint IC product revenue were down (by 4% and 5%, respectively) in Q2 2025, despite sequential growth, suggesting potential challenges in sustaining top-line growth-especially if new market pilot programs (like food) do not convert to full-scale deployments as quickly as anticipated.
  
• Impinj's growth remains heavily reliant on a few large customers and verticals (notably retail/apparel and logistics). Any slowdown, inventory correction, or delayed expansion among these partners could create material revenue volatility due to customer concentration risk.
  
• The company's core margin improvements are currently supported by mix shift to higher-margin products (M800) and timing of lower wafer costs; however, these may be offset longer-term by ongoing ASP declines and the normalization of pricing pressure in the semiconductor industry, potentially compressing gross margins and earnings if not matched by continued cost reductions.
  
• While there is optimism around food sector adoption and supply chain/logistics, management acknowledges that ramping meaningful volume deployments in these new markets will take significant time; if adoption is slower or competition from alternative technologies intensifies, revenue growth projections and overall long-term returns could be at risk.

Valuation

• The analysts have a consensus price target of $171.286 for Impinj based on their expectations of its future earnings growth, profit margins and other risk factors.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $630.4 million, earnings will come to $91.2 million, and it would be trading on a PE ratio of 80.9x, assuming you use a discount rate of 10.4%.
  
• Given the current share price of $159.97, the analyst price target of $171.29 is 6.6% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.