We recently published a list of 10 Worst Performing Mid Cap Stocks to Buy According to Analysts. In this article, we are going to take a look at where IMPINJ, Inc. (NASDAQ:PI) stands against other worst performing mid cap stocks to buy according to analysts.

Market analysts are increasingly highlighting mid-cap stocks as a potentially attractive investment opportunity, particularly in the current economic climate. These stocks offer a balance between the stability of large-cap companies and the growth potential of small-cap firms. In February, Global Investment Strategist at ProShares Advisors Simeon Hyman also shared that he sees mid-cap stocks as a current market “sweet spot.” We covered his sentiment earlier in our 10 Best Performing Mid Cap Stocks to Buy According to Analysts article. Here’s an excerpt from it:

“Currently, mid-caps are undervalued, offering investors about $0.50 on the dollar, a situation that hasn’t occurred with small caps despite their underperformance… mid-caps also have a strong domestic focus, with about 75% of their revenues coming from domestic sources… mid-caps generally offer higher quality than small caps, lacking the losses and negative earnings often seen in small-cap companies.”

Earlier on January 25, Jill Carey Hall, BofA global research head of US small and mid-cap strategy, joined CNBC’s ‘Closing Bell’ to discuss small-cap headwinds and the opportunity in domestic mid-caps. She noted that the backdrop for the Russell 2000 remains challenging, with the profit growth recovery story that many investors were optimistic about last year continuing to be revised downward and pushed further into 2025. As a result, small-cap profits have continued to disappoint, with negative year-over-year earnings growth still prevalent in this segment. In contrast, mid-caps have shown better fundamentals, making them a more attractive option for investors seeking a favorable risk-reward balance, especially in an environment where multiple rate cuts have been priced out of the market.

Hall highlighted that interest rates still play a crucial role in market dynamics. Bank of America’s economists expect the Fed to maintain its current stance without further cuts, which could pose refinancing risks for small caps. Mid-caps, on the other hand, have better balance sheets and fundamental trends, which positions them more favorably. Despite the optimism around economic policies and potential deregulation, Hall noted that small caps face a high bar for investor confidence after a decade of underperformance. Historically, small caps are due for an outperformance cycle, and relative valuations suggest they could offer the best price returns over the next decade. However, for this year, investors are cautious about reentering the small-cap space without a more convincing profit turnaround. Stabilizing or potentially lower interest rates could be beneficial for small caps, as these factors have significantly influenced rallies and sell-offs in the Russell 2000.

She suggested focusing on smaller mid-caps with profits, less leverage, and less refinancing risk, or those that are economically sensitive.

Methodology

We used the Finviz stock screener to compile a list of the worst-performing mid-cap stocks that were trading between $2 billion and $10 billion. We then picked the top 10 stocks with 6-month declines higher than 50% and an average upside potential of over 30%. The stocks are ranked in ascending order of their upside potential. We have also added the hedge fund sentiment for each stock, as of Q4 2024, which was sourced from Insider Monkey’s database.

Note: All data is as of February 26.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

IMPINJ, Inc. (NASDAQ:PI)

6-Month Performance as of February 26: -42.68%

Upside Potential as of February 26: 49.77%

Number of Hedge Fund Holders: 37

IMPINJ, Inc. (NASDAQ:PI) provides a cloud-based platform that wirelessly links everyday objects to the digital world. Through its innovative endpoint ICs, reader systems, and software, it enables businesses to track, manage, and authenticate items across diverse industries, from retail and logistics to healthcare and manufacturing.

Its core revenue driver is its Endpoint IC segment, which saw $289.8 million in revenue for the full year 2024, a 30% jump year-over-year. This segment focuses on selling integrated circuits (ICs) used in RAIN RFID tags, which are attached to items for tracking and inventory management. This growth was propelled by a 34% increase in unit volumes, which were particularly strong in retail apparel, general merchandise, supply chain, and logistics. However, Q1 2025 anticipates a sequential decline in Endpoint IC revenue. This is due to partner inventory corrections, geopolitical uncertainties, and the absence of major new program rollouts. Despite this, January bookings exceeded the Q4 run rate.

The company is banking on its Gen2X technology and M800 series. Gen2X enhances RAIN system performance, and the M800 series enables smaller and cost-effective inlays. This is relevant for cosmetics, accessories, and food, expanding recurring revenue opportunities. IMPINJ, Inc. (NASDAQ:PI) is also pursuing growth in the grocery sector, engaging with major chains for item-level food tagging and self-checkout. These could exceed the volume of any previous projects, with possible ramps in 2026.

Alger Weatherbie Specialized Growth Fund stated the following regarding IMPINJ, Inc. (NASDAQ:PI) in its Q1 2024 investor letter:

“Impinj, Inc. (NASDAQ:PI) engages in the development and sale of RAIN, a radio frequency identification solution. Its platform allows inventory management, patient safety, asset tracking and item authentication for the retail, healthcare, supply chain and logistics. hospitality, food and beverage, ‘and industrial manufacturing industries. During the quarter, shares contributed to performance as the company reported better-than- expected fiscal fourth quarter results, driven by strong revenue growth and profitability. Further, management raised fiscal first quarter guidance above analyst estimates, noting that the company is beginning to see a recovery in the North American retail market, along with year-end channel inventory approaching more normalized levels – both of which had been headwinds for growth in the second half of 2023. The company also noted that key large-scale enterprise deployments appear to be on track, supporting key new use cases for the company’s RFID technology in supply chain, logistics and general merchandise applications Separately, in March, Impinj announced a favorable litigation settlement with a top competitor who will be paying Impinj an annual licensing tee going forward.”

Overall, PI ranks 7th on our list of worst performing mid cap stocks to buy according to analysts. While we acknowledge the growth potential of PI, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap

Disclosure: None. This article is originally published at Insider Monkey.