Immersion Rises 28% YTD: Should You Buy, Hold or Sell the Stock?

Immersion Corporation IMMR shares have gained 28.2% in the year-to-date (YTD) period, outperforming the Computer and Technology sector and the S&P 500 index’s return of 27.4% and 25.3%, respectively. Immersion has also outperformed other players in the Zacks Computer - Peripheral Equipment industry, including Logitech LOGI, TransAct Technologies TACT and Identiv INVE.LOGI, TACT and INVE have lost 14%, 39.1% and 53.2%, respectively, in the year-to-date period. IMMR’s outperformance can be attributed to investors’ confidence in its innovative product portfolio and robust financials.Growing Demand for Haptics Aids IMMRHaptics are crucial components for devices like smartphones, IoT wearable products and automotive. Immersion’s haptic technology is part of gaming products made by Sony to smartphones made by ASUS. Immersion also partners with Original Equipment Manufacturers like Microsoft, Samsung, Google, Sony and Panasonic in the mobile, gaming, wearables and consumer electronics space.Strong partnerships also bolster Immersion’s growth prospects. Over the past year, it has secured agreements with top smartphone manufacturers, gaming firms and automotive leaders, highlighting the widespread adoption of its technology. These partnerships validate Immersion’s product quality and secure long-term revenue potential.IMMR is also gaining from the growth in AR and VR due to the extensive use of haptics in this space. According to a markets and markets report, the global AR/VR market is likely to reach $77.5 billion in 2028 from $32.5 billion in 2023, witnessing a CAGR of 19%. Besides its application in AR/VR gaming, haptic technology is also used in medical training, automotive, report operations, engineering and military.The rising demand for haptics in multiple markets is driving Immersion’s top-line growth. IMMR’s robust IP portfolio encompasses numerous patents as well. These give IMMR a competitive advantage and help the company generate substantial licensing revenues.The Zacks Consensus Estimate for Immersion’s 2024 revenues is pegged at $116.8 million, which suggests growth of a whopping 244.4% year over year. The Zacks Consensus Estimate for 2024 earnings is pegged at $1.96, indicating a year-over-year increase of 88.5%.Immersion YTD PerformanceImage Source: Zacks Investment ResearchImmersion Exhibits a Lofty ValuationAlthough the strong growth factors might make Immersion an attractive stock for purchase, the stock’s valuation is overstretched at present. The company carries a Zacks Value Style Score of C.IMMR is also trading at a premium with a forward 12-month P/S of 6.91X compared with the industry’s 0.56X, reflecting a stretched valuation.What Should Investors Do?While Immersion’s stock has shown solid performance YTD and maintains strong growth drivers, holding the stock at present could be a prudent strategy. This Zacks Rank #3 (Hold) company’s strong positioning in key markets, strategic partnerships and robust IP portfolio support a positive long-term outlook despite its premium valuation. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Logitech International S.A. (LOGI): Free Stock Analysis Report Immersion Corporation (IMMR): Free Stock Analysis Report TransAct Technologies Incorporated (TACT): Free Stock Analysis Report Identiv, Inc. (INVE): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks