Impinj's 2025 Results Underscore Valuation Risk Amid Flat Growth and ASP Pressure

What happened

Impinj reported its fourth quarter and full-year 2025 financial results, revealing a year of stagnant revenue and ongoing challenges in its core endpoint IC business. Full-year revenue likely remained flat or declined slightly from 2024 levels, as lower average selling prices for endpoint ICs offset volume growth, despite industry-wide RAIN tag shipments increasing. The company's dependence on large-scale deployments like Walmart and logistics programs continues, but project lumpiness and aggressive pricing competition from rivals like NXP erode pricing power. Gross margins may have held above 50% due to cost controls and mix shifts, but GAAP profitability remains volatile, exacerbated by one-time items and a leveraged balance sheet with convertible debt. These results align with the DeepValue report's assessment that Impinj faces structural headwinds, with current valuations demanding near-perfect execution on growth and margin targets that appear increasingly precarious.

Implication

The Q4 and full-year 2025 results confirm that Impinj's revenue growth has stalled, with endpoint IC declines due to ASP pressure, making it difficult to justify the stock's high P/E and EV/EBITDA multiples. Execution on key lighthouse accounts like Walmart and logistics programs is critical but faces risks from delays or competitive pricing, which could further dampen growth and margin expansion. Without sustained double-digit revenue growth and gross margin improvement above 55%, the bull scenario priced into the stock is unlikely to materialize, increasing downside risk to the bear case value of $120. The company's convertible debt overhang and volatile earnings add complexity, limiting financial flexibility and amplifying equity dilution concerns in a downturn. Overall, new purchases at current levels offer an unfavorable risk-reward profile, skewed toward capital loss or stagnation rather than attractive returns, reinforcing the 'POTENTIAL SELL' rating.

Thesis delta

The thesis remains unchanged: Impinj's stock is overvalued at $209, with no margin of safety given flat 2025 revenue, ASP-driven declines, and GAAP losses. Any shift would require evidence of sustained 20%+ annual revenue growth and non-GAAP gross margins above 55%, which the latest results do not provide, keeping the risk/reward skewed negatively.