Immersion Corporation IMMR is expected to report second-quarter 2024 results on Aug 9.

The Zacks Consensus Estimate for the top line is pegged at $7.29 million, which indicates a year-over-year improvement of 4.4%. The consensus mark for earnings has been revised upward by 35 cents to 50 cents per share over the past 60 days, which implies a surge of 138.1% from the year-ago quarter’s 15 cents.

The developer and licensor of touch feedback technology, also known as haptic technology, has a decent earnings surprise history. Immersion’s earnings surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing on one occasion, the average surprise being approximately 39%.

Immersion Corporation Price and EPS Surprise

Immersion Corporation price-eps-surprise | Immersion Corporation Quote

Factors Shaping Upcoming Results

Immersion’s second-quarter performance is likely to have benefited from the increasing demand for its touch feedback technology across the gaming, automotive and consumer electronics sectors.  The growing demand for enhanced user experiences, driven by new product launches and partnerships, may have boosted sales of Immersion's patented technology solutions.

Additionally, the increasing adoption of virtual reality (VR) and augmented reality (AR) technologies, which rely heavily on immersive feedback, likely spurred demand for Immersion's products. The expansion of licensing agreements and royalty income from major OEMs (original equipment manufacturers) in these emerging markets are likely to have further supported revenue growth in the to-be-reported quarter.

Furthermore, Immersion's strategic initiatives to enhance its product portfolio and enter new markets, combined with effective cost management, could have improved operational efficiencies, leading to better profit margins. The company’s focus on expanding its intellectual property (IP) portfolio and securing new licensing agreements might also have played a crucial role in driving both top-line and bottom-line growth during the second quarter.

Price Performance & Valuation

Year to date (YTD), shares of Immersion have soared 43%, outperforming the Zacks  Computer - Peripheral Equipment industry’s decline of 29.6%. The IMMR stock has also outperformed compared with other players in the space, including Logitech LOGI, TransAct Technologies TACT and Identiv INVE, which have registered a decline of 11%, 49.2% and 56.1%, respectively, YTD.

YTD Price Performance

Image Source: Zacks Investment Research

Now, let’s look at the value Immersion offers investors at the current levels. IMMR is trading at a premium with a forward 12-month P/S of 6.6X compared with the industry’s 0.61X, reflecting a stretched valuation.