Looking back on internet of things stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including Arlo (NYSE:ARLO) 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 3% below.
Thankfully, share prices of the companies have been resilient as they are up 8.1% on average since the latest earnings results.
Arlo (NYSE:ARLO)
With its name deriving from the Old English word meaning “to see,” Arlo (NYSE:ARLO) provides home security products and other accessories to protect homes and businesses.
Arlo reported revenues of $137.7 million, up 5.9% year on year. This print exceeded analysts’ expectations by 1.1%. Despite the top-line beat, it was still a softer quarter for the company with revenue guidance for next quarter missing analysts’ expectations and a significant miss of analysts’ EBITDA estimates.
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $12.15.
Is now the time to buy Arlo? 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 an impressive beat of analysts’ adjusted operating income and organic revenue estimates.
Vontier delivered 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% since reporting. It currently trades at $38.84.
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 9% since the results and currently trades at $1.61.
Read our full analysis of SmartRent’s results here.
Rockwell Automation (NYSE:ROK)
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 $2.04 billion, down 20.6% year on year. This result missed analysts’ expectations by 2.2%. Overall, it was a slower quarter as it also recorded full-year EPS guidance missing analysts’ expectations significantly and a slight miss of analysts’ organic revenue estimates.
The stock is flat since reporting and currently trades at $292.51.
Read our full, actionable report on Rockwell Automation here, it’s free.
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 result was in line with analysts’ expectations. Aside from that, it was a mixed quarter as it also recorded a decent beat of analysts’ adjusted operating income estimates but organic revenue in line with analysts’ estimates.
The stock is up 16.2% since reporting and currently trades at $196.31.
Read our full, actionable report on AMETEK here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September, a quarter in November) have kept 2024 stock markets frothy, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there's still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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