As the Q2 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 SmartRent (NYSE: SMRT) 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 strong Q2. As a group, revenues beat analysts’ consensus estimates by 2.4% while next quarter’s revenue guidance was in line.
Thankfully, share prices of the companies have been resilient as they are up 9.5% on average since the latest earnings results.
Slowest Q2: 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 $38.31 million, down 21% year on year. This print fell short of analysts’ expectations by 1.4%. Overall, it was a softer quarter for the company with a significant miss of analysts’ EBITDA estimates and EPS in line with analysts’ estimates.
"SmartRent's opportunities for profitable growth and sustained market leadership are compelling. We operate in a large, expanding market with a purpose-built, differentiated platform and a growing SaaS footprint. As a hardware-enabled SaaS company with meaningful scale advantages, our foundation is built on domain expertise and close alignment with the needs of our customers - property owners and operators," commented Frank Martell, President and CEO of SmartRent.
SmartRent delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. Interestingly, the stock is up 58.2% since reporting and currently trades at $1.55.
Read our full report on SmartRent here, it’s free for active Edge members.
Best Q2: 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 $2.14 billion, up 4.6% year on year, outperforming analysts’ expectations by 3.8%. The business had an exceptional quarter with an impressive beat of analysts’ organic revenue estimates and a solid beat of analysts’ EBITDA estimates.
However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $347.04.
Is now the time to buy Rockwell Automation? Access our full analysis of the earnings results here, it’s free for active Edge members.
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 $4.55 billion, up 3.9% year on year, falling short of analysts’ expectations by 0.8%. It was a slower quarter as it posted a miss of analysts’ EBITDA and revenue estimates.
As expected, the stock is down 7.9% since the results and currently trades at $129.31.
Read our full analysis of Emerson Electric’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 $1.78 billion, up 2.5% year on year. This result topped analysts’ expectations by 2.8%. Overall, it was a very strong quarter as it also produced a solid beat of analysts’ revenue and EBITDA estimates.
The stock is up 4.9% since reporting and currently trades at $185.47.
Read our full, actionable report on AMETEK here, it’s free for active Edge members.
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 $773.5 million, up 11.1% year on year. This number surpassed analysts’ expectations by 5.4%. It was a very strong quarter as it also put up an impressive beat of analysts’ organic revenue estimates.
Vontier scored the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The stock is up 6.9% since reporting and currently trades at $42.51.
Read our full, actionable report on Vontier here, it’s free for active Edge members.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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