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 specialized technology industry, including Arlo Technologies (NYSE:ARLO) and its peers.
Companies in this sector, especially if they invest wisely, could see demand tailwinds as the world moves towards more IoT (Internet of Things), automation, and analytics. Enterprises across most industries will balk at taking these journeys solo and will enlist companies with expertise and scale in these areas. However, headwinds could include rising competition from larger technology firms, as digitization lowers barriers to entry in the space. Additionally, companies in the space will likely face evolving regulatory scrutiny over data privacy, particularly for surveillance and security technologies. This could make companies have to continually pivot and invest.
The 8 specialized technology stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 4.1% while next quarter’s revenue guidance was 1.5% below.
Thankfully, share prices of the companies have been resilient as they are up 8.6% on average since the latest earnings results.
Arlo Technologies (NYSE:ARLO)
Originally spun off from networking equipment maker Netgear in 2018, Arlo Technologies (NYSE:ARLO) provides cloud-based smart security devices and subscription services that help consumers and businesses monitor and protect their homes, properties, and loved ones.
Arlo Technologies reported revenues of $129.4 million, up 1.5% year on year. This print exceeded analysts’ expectations by 4.8%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ revenue estimates and revenue guidance for next quarter exceeding analysts’ expectations.
Interestingly, the stock is up 11.8% since reporting and currently trades at $18.39.
Best Q2: Napco (NASDAQ:NSSC)
Protecting everything from schools to government facilities since 1969, Napco Security Technologies (NASDAQ:NSSC) manufactures electronic security devices, access control systems, and communication services for intrusion and fire alarm systems.
Napco reported revenues of $50.72 million, flat year on year, outperforming analysts’ expectations by 14.1%. The business had an incredible quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ revenue estimates.
Napco pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 37% since reporting. It currently trades at $43.44.
Is now the time to buy Napco? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q2: PAR Technology (NYSE:PAR)
Originally founded in 1968 as a defense contractor for the U.S. government, PAR Technology (NYSE:PAR) provides cloud-based software, payment processing, and hardware solutions that help restaurants manage everything from point-of-sale to customer loyalty programs.
PAR Technology reported revenues of $112.4 million, up 43.8% year on year, exceeding analysts’ expectations by 1.3%. Still, it was a slower quarter as it posted a significant miss of analysts’ ARR estimates.
As expected, the stock is down 34.5% since the results and currently trades at $37.96.
Read our full analysis of PAR Technology’s results here.
Zebra (NASDAQ:ZBRA)
Taking its name from the black and white stripes of barcodes, Zebra Technologies (NASDAQ:ZBRA) provides barcode scanners, mobile computers, RFID systems, and other data capture technologies that help businesses track assets and optimize operations.
Zebra reported revenues of $1.29 billion, up 6.2% year on year. This print met analysts’ expectations. It was a very strong quarter as it also produced a solid beat of analysts’ EPS guidance for next quarter estimates and an impressive beat of analysts’ full-year EPS guidance estimates.
Zebra had the weakest performance against analyst estimates among its peers. The stock is down 11.2% since reporting and currently trades at $304.05.
Read our full, actionable report on Zebra here, it’s free for active Edge members.
Mirion (NYSE:MIR)
With its technology protecting workers in over 130 countries and equipment used in 80% of cancer centers worldwide, Mirion Technologies (NYSE:MIR) provides radiation detection, measurement, and monitoring solutions for medical, nuclear energy, defense, and scientific research applications.
Mirion reported revenues of $222.9 million, up 7.6% year on year. This result topped analysts’ expectations by 3.1%. Overall, it was a very strong quarter as it also logged a solid beat of analysts’ revenue estimates and EPS in line with analysts’ estimates.
The stock is up 1.9% since reporting and currently trades at $22.75.
Read our full, actionable report on Mirion here, it’s free for active Edge members.
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), 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 for 2025.
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