Looking back on internet of things stocks' Q1 earnings, we examine this quarter's best and worst performers, including SmartRent (NYSE:SMRT) and its peers.
Industrial Internet of Things (IoT) companies are buoyed by the secular trend of a more connected world. They often specialize in nascent areas such as hardware and services for factory automation, fleet tracking, or smart home technologies. Those who play their cards right can generate recurring subscription revenues by providing cloud-based software services, boosting their margins. On the other hand, if the technologies these companies have invested in don’t pan out, they may have to make costly pivots.
The 7 internet of things stocks we track reported a mixed Q1; on average, revenues beat analyst consensus estimates by 1%. while next quarter's revenue guidance was 2.6% below consensus. Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. The start of 2024 has been a bumpier ride, as the market switches between optimism and pessimism around rate cuts due to mixed inflation data, and while some of the internet of things stocks have fared somewhat better than others, they collectively declined, with share prices falling 1.2% on average since the previous earnings results.
Weakest Q1: SmartRent (NYSE:SMRT) Founded by an employee at a real estate rental company, SmartRent (NYSE:SMRT) provides smart home devices and software for multifamily residential properties, single-family rental homes, and student housing communities.
SmartRent reported revenues of $50.49 million, down 22.4% year on year, falling short of analysts' expectations by 1.2%. It was a weak quarter for the company with a miss of analysts' earnings estimates.
“SmartRent is not just about creating smart homes; we are fundamentally changing the way people interact with their living environments,” said Lucas Haldeman, CEO of SmartRent.
SmartRent delivered the slowest revenue growth of the whole group. The stock is down 4.1% since reporting and currently trades at $2.35.
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Best Q1: Rockwell Automation (NYSE:ROK) One of the first companies to address industrial automation, Rockwell Automation (NYSE:ROK) sells products that help customers extract more efficiency from their machinery.
Rockwell Automation reported revenues of $2.13 billion, down 6.6% year on year, outperforming analysts' expectations by 3.5%. It was an exceptional quarter for the company with an impressive beat of analysts' organic revenue estimates and a decent beat of analysts' earnings estimates.
Although it had a great quarter compared its peers, the market seems unhappy with the results as the stock is down 5.9% since reporting. It currently trades at $261.24.
Arlo (NYSE:ARLO) With its name deriving from the Old English word meaning “to see,” Arlo (NYSE:ARLO) provides home security products and other accessories to protect homes and businesses.
Arlo reported revenues of $124.2 million, up 11.9% year on year, in line with analysts' expectations. It was a weak quarter for the company with a miss of analysts' earnings estimates.
Interestingly, the stock is up 20.2% since the results and currently trades at $16.75.
AMETEK (NYSE:AME) Started from its humble beginnings in motor repair, AMETEK (NYSE:AME) manufactures electronic devices used in industries like aerospace, power, and healthcare.
AMETEK reported revenues of $1.74 billion, up 8.7% year on year, falling short of analysts' expectations by 2.4%. Looking more broadly, it was a weak quarter for the company with a miss of analysts' organic revenue estimates.
AMETEK had the weakest performance against analyst estimates among its peers. The stock is down 5.6% since reporting and currently trades at $164.13.
Vontier (NYSE:VNT) A spin-off of a spin-off, Vontier (NYSE:VNT) provides electronic products and systems to the transportation, automotive, and manufacturing sectors.
Vontier reported revenues of $755.8 million, down 2.7% year on year, in line with analysts' expectations. Looking more broadly, it was a slower quarter for the company with revenue guidance for next quarter missing analysts' expectations and underwhelming earnings guidance for the full year.
The stock is down 6.5% since reporting and currently trades at $37.99.
This content was originally published on Stock Story
