Airgain, Inc. (AIRG) specializes in simplifying wireless connectivity across the value chain, from embedded components to integrated systems. The company’s antennas, modems, and systems cater to access points, IoT applications, and smart devices across enterprise, consumer, and automotive markets, writes George Gilder, editor of Gilder’s Technology Report.

Airgain's embedded antenna designs are integral for current Wi-Fi technologies and are paving the way for Wi-Fi 7. New products such as the Lantern Fixed Wireless Access system and the Lighthouse Smart C-Band Repeater align with the growing demand for reliable and fast wireless. All good.

And as Airgain repositions itself from component maker to system supplier, it is a strong candidate to capture emerging opportunities, particularly in Asset Tracking and 5G Connectivity.

Airgain (AIRG)
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In Asset Tracking, Airgain is making remarkable strides, with deployments spanning sectors including transportation, supply chain, and cold chain logistics. Recurring revenue comes via a suite of subscription-based offerings, including the NimbeLink cloud-based device enablement platform and comprehensive tracking information dashboards. These together enhance operational efficiency and provide critical insights for the company’s clients.

All this product and market goodness aside, Airgain, buffeted badly in the Great Slump, reported more disappointing results for Q4. Sales fell by $3.6 million sequentially to $10.1 million. Revenue was off by almost 50% YOY from $19.9 million in Q4 of 2022. The company reported a net loss of $5.5 million, or 52 cents per share, on a GAAP basis. Non-GAAP net loss was $3.5 million, or 33 cents per share.

The company's leadership does anticipate a gradual recovery for 2024, driven by a cyclical market recovery and more new product introductions. Airgain's backlog data support that view.

For the first quarter of 2024, Airgain forecasts sales between $13.3 million and $14.7 million, a ~10 percentage point improvement in gross margin to between 38.6% and 41.6% (GAAP basis) and a GAAP net loss per share of approximately 24 cents.

While Airgain’s performance has been subdued, its growth prospects remain strong. We like the company's robust pipeline and strategic transitions. The recovery in Airgain's end markets and the launch of new products could trigger significant appreciation in the stock's value.

Airgain remains an underestimated stock with a compelling turnaround story. We’ll continue to hold. The road up the hill may be bumpy, but we like the view we expect to see from the summit.

Recommended Action: Buy AIRG.

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