Analyst Brad Erickson at Pacific Crest Securities downgraded IMPINJ Inc. (NASDAQ: PI) from Overweight to Sector-Weight rating. IMPINJ shares fell to 7.18 percent at $55.11 on Tuesday.
This comes as the stock has more than doubled in the past three months to a record close on Monday, and has more than tripled since its first day of trade in June of 2016. The company makes retail ID tags and uses high-frequency waves to deliver information about the tagged items.
According to Erickson, IMPINJ stock has too high of a risk/reward ration to justify currently holding it. “With the July 18-20 RAIN event approaching, shares could move higher near term, but with the upside now likely required to hold the stock, we think risk/reward is no longer favorable enough to justify Overweight with shares trading at 6.5x EV/revenue, a 44% premium to the group.”
The analyst added, “We believe the company’s pipeline of potential customers is as strong as ever, though commentary suggests timing of deal closures continues to be difficult to forecast.” He noted that while IMPINJ is still the leader of its industry, investors have already priced in opportunities in Rain RFID (radio-frequency identification).