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The Zacks Consensus Estimate for the top line is pegged at $7.29 million, which indicates a year-over-year improvement of 4.4%. The consensus mark for earnings has been revised upward by 35 cents to 50 cents per share over the past 60 days, which implies a surge of 138.1% from the year-ago quarter’s 15 cents.
The developer and licensor of touch feedback technology, also known as haptic technology, has a decent earnings surprise history. Immersion’s earnings surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing on one occasion, the average surprise being approximately 39%.
Immersion’s second-quarter performance is likely to have benefited from the increasing demand for its touch feedback technology across the gaming, automotive and consumer electronics sectors. The growing demand for enhanced user experiences, driven by new product launches and partnerships, may have boosted sales of Immersion's patented technology solutions.
Additionally, the increasing adoption of virtual reality (VR) and augmented reality (AR) technologies, which rely heavily on immersive feedback, likely spurred demand for Immersion's products. The expansion of licensing agreements and royalty income from major OEMs (original equipment manufacturers) in these emerging markets are likely to have further supported revenue growth in the to-be-reported quarter.
Furthermore, Immersion's strategic initiatives to enhance its product portfolio and enter new markets, combined with effective cost management, could have improved operational efficiencies, leading to better profit margins. The company’s focus on expanding its intellectual property (IP) portfolio and securing new licensing agreements might also have played a crucial role in driving both top-line and bottom-line growth during the second quarter.
Price Performance & Valuation
Year to date (YTD), shares of Immersion have soared 43%, outperforming the Zacks Computer - Peripheral Equipment industry’s decline of 29.6%. The IMMR stock has also outperformed compared with other players in the space, including Logitech (LOGI - Free Report) , TransAct Technologies (TACT - Free Report) and Identiv (INVE - Free Report) , which have registered a decline of 11%, 49.2% and 56.1%, respectively, YTD.
YTD Price Performance
Image Source: Zacks Investment Research
Now, let’s look at the value Immersion offers investors at the current levels. IMMR is trading at a premium with a forward 12-month P/S of 6.6X compared with the industry’s 0.61X, reflecting a stretched valuation.
Image Source: Zacks Investment Research
Investment Consideration
Immersion’s technology is at the heart of many advanced haptic applications, positioning the company to benefit from the growing demand across multiple end-markets. According to a Fortune Business Insights report, the global haptic technology market size will expand at a CAGR of 13.6% from $2.99 billion in 2023 to $7.31 billion by 2030.
Immersion's strong intellectual property portfolio, comprising numerous patents, provides a competitive edge and significant licensing revenues. Immersion’s technology is licensed by major companies across the globe, ensuring a steady stream of income that supports its growth initiatives.
Furthermore, Immersion’s strategic focus on expanding its product offerings into new verticals, such as medical devices and industrial applications, showcases its versatility and broad market applicability. This diversification reduces reliance on any single industry and opens up multiple revenue streams.
Additionally, Immersion’s sustained focus on strengthening market positions through partnerships bodes well for long-term growth prospects. Over the past year, it has secured agreements with leading smartphone manufacturers, gaming companies and automotive giants, underscoring the widespread adoption of its technology. These partnerships not only validate the quality and effectiveness of Immersion’s products but also ensure long-term revenue growth.
Immersion has more than 15 award-winning designs and products, which are being used on more than three billion devices globally. Currently, it has more than 150 licensed customers.
Conclusion
Immersion's robust market position and innovative haptic technology make it an appealing investment. Despite its high valuation, the company's strategic initiatives and strong industry growth prospects suggest a promising future. As a Zacks Rank #1 (Strong Buy) stock, Immersion offers significant potential for substantial returns, making it a compelling option for investors looking to capitalize on the growing demand for haptic technology. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Should You Invest In Immersion (IMMR) Ahead of Q2 Earnings?
Immersion Corporation (IMMR - Free Report) is expected to report second-quarter 2024 results on Aug 9.
The Zacks Consensus Estimate for the top line is pegged at $7.29 million, which indicates a year-over-year improvement of 4.4%. The consensus mark for earnings has been revised upward by 35 cents to 50 cents per share over the past 60 days, which implies a surge of 138.1% from the year-ago quarter’s 15 cents.
The developer and licensor of touch feedback technology, also known as haptic technology, has a decent earnings surprise history. Immersion’s earnings surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing on one occasion, the average surprise being approximately 39%.
Immersion Corporation Price and EPS Surprise
Immersion Corporation price-eps-surprise | Immersion Corporation Quote
Factors Shaping Upcoming Results
Immersion’s second-quarter performance is likely to have benefited from the increasing demand for its touch feedback technology across the gaming, automotive and consumer electronics sectors. The growing demand for enhanced user experiences, driven by new product launches and partnerships, may have boosted sales of Immersion's patented technology solutions.
Additionally, the increasing adoption of virtual reality (VR) and augmented reality (AR) technologies, which rely heavily on immersive feedback, likely spurred demand for Immersion's products. The expansion of licensing agreements and royalty income from major OEMs (original equipment manufacturers) in these emerging markets are likely to have further supported revenue growth in the to-be-reported quarter.
Furthermore, Immersion's strategic initiatives to enhance its product portfolio and enter new markets, combined with effective cost management, could have improved operational efficiencies, leading to better profit margins. The company’s focus on expanding its intellectual property (IP) portfolio and securing new licensing agreements might also have played a crucial role in driving both top-line and bottom-line growth during the second quarter.
Price Performance & Valuation
Year to date (YTD), shares of Immersion have soared 43%, outperforming the Zacks Computer - Peripheral Equipment industry’s decline of 29.6%. The IMMR stock has also outperformed compared with other players in the space, including Logitech (LOGI - Free Report) , TransAct Technologies (TACT - Free Report) and Identiv (INVE - Free Report) , which have registered a decline of 11%, 49.2% and 56.1%, respectively, YTD.
YTD Price Performance
Image Source: Zacks Investment Research
Now, let’s look at the value Immersion offers investors at the current levels. IMMR is trading at a premium with a forward 12-month P/S of 6.6X compared with the industry’s 0.61X, reflecting a stretched valuation.
Image Source: Zacks Investment Research
Investment Consideration
Immersion’s technology is at the heart of many advanced haptic applications, positioning the company to benefit from the growing demand across multiple end-markets. According to a Fortune Business Insights report, the global haptic technology market size will expand at a CAGR of 13.6% from $2.99 billion in 2023 to $7.31 billion by 2030.
Immersion's strong intellectual property portfolio, comprising numerous patents, provides a competitive edge and significant licensing revenues. Immersion’s technology is licensed by major companies across the globe, ensuring a steady stream of income that supports its growth initiatives.
Furthermore, Immersion’s strategic focus on expanding its product offerings into new verticals, such as medical devices and industrial applications, showcases its versatility and broad market applicability. This diversification reduces reliance on any single industry and opens up multiple revenue streams.
Additionally, Immersion’s sustained focus on strengthening market positions through partnerships bodes well for long-term growth prospects. Over the past year, it has secured agreements with leading smartphone manufacturers, gaming companies and automotive giants, underscoring the widespread adoption of its technology. These partnerships not only validate the quality and effectiveness of Immersion’s products but also ensure long-term revenue growth.
Immersion has more than 15 award-winning designs and products, which are being used on more than three billion devices globally. Currently, it has more than 150 licensed customers.
Conclusion
Immersion's robust market position and innovative haptic technology make it an appealing investment. Despite its high valuation, the company's strategic initiatives and strong industry growth prospects suggest a promising future. As a Zacks Rank #1 (Strong Buy) stock, Immersion offers significant potential for substantial returns, making it a compelling option for investors looking to capitalize on the growing demand for haptic technology. You can see the complete list of today’s Zacks #1 Rank stocks here.