As the Q1 earnings season wraps, let’s dig into this quarter’s best and worst performers in the internet of things industry, 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 6 internet of things stocks we track reported a satisfactory Q1. As a group, revenues beat analysts’ consensus estimates by 1.9% while next quarter’s revenue guidance was in line.
Luckily, internet of things stocks have performed well with share prices up 11.1% on average since the latest 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 $41.34 million, down 18.1% year on year. This print exceeded analysts’ expectations by 3.1%. Despite the top-line beat, it was still a softer quarter for the company with a significant miss of analysts’ adjusted operating income estimates.
John Dorman, SmartRent's Interim Chief Executive Officer, commented, "We have taken foundational steps to rebuild SmartRent as a more customer-centric, execution-driven organization. While our adoption pace has not yet matched the scale of our installed base, we are actively retooling our operations to better align with how customers adopt, deploy and expand our solutions. This work is central to our shift toward a hardware-enabled SaaS model that prioritizes recurring revenue, customer value, and long-term profitable growth.
SmartRent Total Revenue
SmartRent delivered the slowest revenue growth of the whole group. Unsurprisingly, the stock is down 3.9% since reporting and currently trades at $0.87.
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 $2.00 billion, down 5.9% year on year, outperforming analysts’ expectations by 1.1%. The business had an exceptional quarter with an impressive beat of analysts’ EBITDA estimates.
Rockwell Automation Total Revenue
The market seems happy with the results as the stock is up 22.2% since reporting. It currently trades at $309.
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 $1.73 billion, flat year on year, falling short of analysts’ expectations by 0.7%. It was a mixed quarter as it posted a decent beat of analysts’ EBITDA estimates but a slight miss of analysts’ organic revenue estimates.
AMETEK delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 7.5% since the results and currently trades at $181.88.
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 $741.1 million, down 1.9% year on year. This print surpassed analysts’ expectations by 2.8%. It was a strong quarter as it also recorded a solid beat of analysts’ adjusted operating income estimates and a solid beat of analysts’ organic revenue estimates.
Vontier had the weakest full-year guidance update among its peers. The stock is up 16.3% since reporting and currently trades at $36.96.
Founded in 1890, Emerson Electric (NYSE:EMR) is a multinational technology and engineering company providing solutions in the industrial, commercial, and residential markets.
Emerson Electric reported revenues of $4.43 billion, up 1.3% year on year. This result beat analysts’ expectations by 1.1%. Overall, it was a strong quarter as it also logged full-year EPS guidance slightly topping analysts’ expectations and a decent beat of analysts’ EBITDA estimates.
Emerson Electric achieved the fastest revenue growth among its peers. The stock is up 11% since reporting and currently trades at $119.11.
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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