Inseego INSG shares plunged 40.36% to close at $10.83 on Wednesday following disappointing third-quarter 2024 results.
INSG incurred a loss of 7 cents per share in the reported quarter, which lagged the Zacks Consensus Estimate for earnings of 9 cents. INSG had reported a loss of $1.95 in the year-ago quarter.
Total revenues of $54 million increased 30.6% year over year but missed the Zacks Consensus Estimate of $56 million by 4.03%.
Inseego’s stock has skyrocketed 393.6% compared with the Zacks Computer and Technology sector’s rise of 30% in the year-to-date period.
Inseego Price, Consensus and EPS Surprise
Inseego price-consensus-eps-surprise-chart | Inseego Quote
INSG’s Q3 Top-Line Results
Total revenues from continuing operations in the third quarter of 2024 increased 30.6% year over year to $54 million.
This growth was driven by strong carrier mobile hotspot products through MiFi promos and rising SaaS subscriptions from contract renewals.
Product revenues, consisting of Mobile solutions and Fixed wireless access solutions, rose 25% year over year to $42 million.
Services and other revenues were $12 million, increasing 56% year over year from $7.7 million.
INSG plans to discontinue its Telematics business, a move expected to generate $52 million in cash, enhancing the company's liquidity and financial flexibility. The agreement is expected to close in the fourth quarter of 2024.
With increased liquidity from this transaction, Inseego is focused on advancing its 5G pipeline, developing the latest products and driving long-term growth.
As part of this effort, the company recently launched the multi-carrier-certified 5G indoor router, FX3110, as part of the Inseego Ignite channel program and introduced the first MiFi specifically for the Inseego Ignite channel program with all Tier 1 North America operators.
INSG’s Operating Details
Inseego's third-quarter 2024 gross profit was $18.8 million. It reported a gross loss of $2.2 million in the year-ago quarter.
Adjusted EBITDA continuing operations for the third quarter was $6.7 million, reflecting a 12.4% margin. This marks an increase from the adjusted EBITDA of $2 million and a 4.8% margin reported in the year-ago quarter.
Inseego’s Balance Sheet & Cash Flow
As of Sept. 30, 2024, INSG had cash and cash equivalents of $12 million compared with $49 million as of June 30, 2024.
The operating cash flow was $12.1 million in the reported quarter, down from $28.8 million in the previous quarter.
The company has restructured 91% of its outstanding convertible notes, significantly reducing debt and optimizing its capital structure.
INSG’s Q4 Guidance
Inseego expects total revenues from continuing operations between $43 million and $47 million, indicating 25% year-over-year growth at the mid-point.
Adjusted EBITDA from continuing operations is expected between $3 million and $4 million, suggesting more than 50% year-over-year growth at the mid-point.
Zacks Rank & Stocks to Consider
Currently, Inseego has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer & Technology sector are Tuya TUYA, NVIDIA NVDA and NetApp NTAP. Tuya sports a Zacks Rank #1 (Strong Buy), and Palo Alto and NVIDIA each carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tuya’s shares have lost 35.7% in the year-to-date period. TUYA is set to report third-quarter 2024 results on Nov. 18.
NVIDIA’s shares have skyrocketed 195.9% year to date. NVDA is set to report third-quarter fiscal 2025 results on Nov. 20.
NetApp’s shares have jumped 35.8% year to date. NTAP is set to report second-quarter fiscal 2025 results on Nov. 21.
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