As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the internet of things industry, including Trimble (NASDAQ:TRMB) 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 Q3. As a group, revenues missed analysts’ consensus estimates by 1.1% while next quarter’s revenue guidance was 2.9% below.
Thankfully, share prices of the companies have been resilient as they are up 9.7% on average since the latest earnings results.
Trimble (NASDAQ:TRMB)
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 $875.8 million, down 8.5% year on year. This print exceeded analysts’ expectations by 1.3%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ EBITDA estimates.
"The Trimble team executed well in the quarter, exceeding expectations on both top and bottom lines, while delivering a record $2.19 billion of ARR and record gross margin of 68.5 percent," said Rob Painter, Trimble's President and Chief Executive Officer.
Trimble delivered the weakest full-year guidance update of the whole group. Interestingly, the stock is up 17.8% since reporting and currently trades at $72.58.
Is now the time to buy Trimble? Access our full analysis of the earnings results here, it’s free.
Best Q3: 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 $750 million, down 2% year on year, outperforming analysts’ expectations by 2.8%. The business had a very strong quarter with a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ organic revenue estimates.
Vontier scored the biggest analyst estimates beat and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 14.2% since reporting. It currently trades at $38.93.
Is now the time to buy Vontier? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: 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 $40.51 million, down 30.3% year on year, falling short of analysts’ expectations by 11.8%. It was a softer quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
SmartRent delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 3.4% since the results and currently trades at $1.71.
Read our full analysis of SmartRent’s results here.
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 $1.71 billion, up 5.3% year on year. This print met analysts’ expectations. Aside from that, it was a mixed quarter as it also produced a decent beat of analysts’ adjusted operating income estimates but organic revenue in line with analysts’ estimates.
The stock is up 15% since reporting and currently trades at $194.33.
Read our full, actionable report on AMETEK here, it’s free.
Emerson Electric (NYSE:EMR)
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 $4.62 billion, up 12.9% year on year. This number topped analysts’ expectations by 1.2%. More broadly, it was a mixed quarter as it also produced full-year EPS guidance slightly topping analysts’ expectations but a significant miss of analysts’ EBITDA estimates.
Emerson Electric delivered the fastest revenue growth among its peers. The stock is up 21.3% since reporting and currently trades at $133.15.
Read our full, actionable report on Emerson Electric here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), has fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty heading into 2025.
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