The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Vontier (NYSE: VNT) and the rest of the internet of things stocks fared in Q3.
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.
Luckily, internet of things stocks have performed well with share prices up 11.3% on average since the latest earnings results.
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. This print exceeded analysts’ expectations by 2.8%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ adjusted operating income and organic revenue estimates.
Vontier pulled off the biggest analyst estimates beat and highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 14.7% since reporting and currently trades at $39.08.
Is now the time to buy Vontier? Access our full analysis of the earnings results here, it’s free.
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, outperforming analysts’ expectations by 1.3%. The business had a very strong quarter with an impressive beat of analysts’ EBITDA estimates.
The market seems happy with the results as the stock is up 23.6% since reporting. It currently trades at $76.15.
Is now the time to buy Trimble? 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 1.1% since the results and currently trades at $1.75.
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. More broadly, it was a mixed quarter as it also logged a decent beat of analysts’ adjusted operating income estimates but organic revenue in line with analysts’ estimates.
The stock is up 15.4% since reporting and currently trades at $195.
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 print topped analysts’ expectations by 1.2%. Aside from that, it was a mixed quarter as it also logged full-year EPS guidance slightly topping analysts’ expectations but a significant miss of analysts’ EBITDA estimates.
Emerson Electric pulled off the fastest revenue growth among its peers. The stock is up 22.3% since reporting and currently trades at $134.33.
Read our full, actionable report on Emerson Electric 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 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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