Shares of Impinj (NASDAQ: PI) were moving higher today on news that the company was joining the S&P SmallCap 600 after S&P Global made its quarterly rebalancing announcement Friday afternoon.
As a result, Impinj stock was trading higher by 10% as of 2:03 p.m. ET on Monday.
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Impinj gets a stamp of approval
The announcement from the S&P was the latest sign that Impinj's recent growth is here to stay as the specialist in RAIN RFID tags, which allow the tracing of specific items, has surged since the pandemic.
Being added to the S&P 600 also has significance because ETFs that track the index, including the Vanguard S&P Small-Cap 600 ETF and iShares Core S&P Small-Cap ETF , will now have to buy the stock, helping to increase demand for it.
Stocks like Impinj typically gain on addition by the S&P for both the endorsement from the stock market index manager and because it will trigger buying by ETFs. The addition will go into effect on Sept. 23.
The addition comes after a string of strong results from Impinj, including a second-quarter earnings report that included a 19% increase in revenue to $102.5 million, and a surge in gross margin from 51% to 56.1%, which led bottom-line results to surge as well.
Can Impinj stock keep climbing?
Impinj stock is up nearly 400% over the last five years as revenue and profits have soared, and the company is a leader in its industry, providing RFID technology to companies like retailers and manufacturers that use it for supply chain management.
Looking ahead to the third quarter, the company sees revenue growing 42% to a range of $91 million to $94 million, and it expects adjusted earnings per share of $0.46 to $0.50, up from breakeven in the quarter a year ago.
The stock is pricey, but if it can keep up its growth, it should move higher over the long term.
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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends S&P Global and iShares Trust-iShares Core S&P Small-Cap ETF. The Motley Fool recommends Impinj. The Motley Fool has a disclosure policy .
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