As the Q1 earnings season wraps, let’s dig into this quarter’s best and worst performers in the internet of things industry, including AMETEK (NYSE:AME) 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.
Thankfully, share prices of the companies have been resilient as they are up 8% on average since the latest earnings results.
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 $1.73 billion, flat year on year. This print fell short of analysts’ expectations by 0.7%. Overall, it was a mixed quarter for the company with a decent beat of analysts’ EBITDA estimates but a slight miss of analysts’ organic revenue estimates.
"AMETEK delivered excellent results in the first quarter with high single digit orders growth, outstanding operating performance, solid free cash flow conversion and strong margin expansion," stated David A. Zapico, AMETEK Chairman and Chief Executive Officer.
AMETEK Total Revenue
AMETEK delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 5% since reporting and currently trades at $177.64.
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 20.9% since reporting. It currently trades at $305.54.
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, exceeding analysts’ expectations by 3.1%. Still, it was a softer quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
SmartRent delivered the slowest revenue growth in the group. As expected, the stock is down 11.1% since the results and currently trades at $0.80.
Playing a role in the construction of the Paris Grand, Trimble (NASDAQ:TRMB) offers geospatial devices and technology to the agriculture, construction, transportation, and logistics industries.
Trimble reported revenues of $840.6 million, down 11.8% year on year. This result surpassed analysts’ expectations by 3.8%. Zooming out, it was a satisfactory quarter as it also recorded an impressive beat of analysts’ EBITDA estimates but EPS guidance for next quarter missing analysts’ expectations.
Trimble delivered the biggest analyst estimates beat and highest full-year guidance raise among its peers. The stock is up 12.2% since reporting and currently trades at $71.02.
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 topped 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 11% since reporting and currently trades at $35.26.
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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