Q3 Earnings Highs And Lows: Rockwell Automation (NYSE:ROK) Vs The Rest Of The Internet of Things Stocks

December 24, 2024 at 04:05 AM EST

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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 Rockwell Automation (NYSE: ROK) 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.

In light of this news, share prices of the companies have held steady as they are up 3.6% on average since the latest earnings results.

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 print fell short of analysts’ expectations by 2.2%. Overall, it was a slower quarter for the company with full-year EPS guidance missing analysts’ expectations significantly and a slight miss of analysts’ organic revenue estimates.

"Orders for the quarter came in lower than expected, reflecting continued softness in many of our end markets. Operating performance was solid, with good sales conversion, margin, and EPS. The performance of our Lifecycle Services segment stands out, with its higher exposure to process end markets, growth in digital services, and continued margin expansion. Reflecting on the full year, our people around the world have demonstrated remarkable dedication to serve our customers and bring new innovation to market, and to make the changes necessary to position us for market-beating growth and profit,” said Blake Moret, Chairman and CEO.

The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $292.

Read our full report on Rockwell Automation 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 pulled off 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 8% since reporting. It currently trades at $36.82.

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 12.4% since the results and currently trades at $1.55.

Read our full analysis of SmartRent’s results here.

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 number beat analysts’ expectations by 1.3%. It was a very strong quarter as it also recorded a solid beat of analysts’ EBITDA estimates.

Trimble had the weakest full-year guidance update among its peers. The stock is up 14.6% since reporting and currently trades at $70.60.

Read our full, actionable report on Trimble 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 number met analysts’ expectations. Zooming out, 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 9.7% since reporting and currently trades at $185.29.

Read our full, actionable report on AMETEK here, it’s free.

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 has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), 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 the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.

Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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