You may not have heard of Socket Mobile (NASDAQ:SCKT) before, but Socket Mobile stock is rocketing higher Friday. Most of the move higher comes from its third-quarter earnings report, but there is something else to pay watch. At the heart of its success is a series of pandemic innovations.
So what exactly is Socket Mobile? The company bills itself as a provider of data capture and delivery solutions for productivity in the workforce. Essentially, it markets a series of barcode and RFID scanners that help get business done. But why exactly is Socket Mobile stock doing so well?
The big piece of news is simple. Socket Mobile reported third-quarter earnings that were simply impressive. Revenue came in at $4.1 million, up 51% from the second quarter. Net income came in at $424,000 — up from a net loss of $768,000 in Q2. Those are huge sequential improvements, and investors are clearly paying attention.
Importantly, this is also a quintessential novel coronavirus story. At the start of the pandemic, Socket Mobile seemed doomed to fail. Some of its primary customers are brick-and-mortar retailers. But with stay-at-home orders and non-essential business closures, there was just not as much interest in purchasing barcode scanners for physical retail.
Then, Socket Mobile got creative. As so many businesses changed the way they operate, a real opportunity opened up for Socket Mobile stock to thrive. It began to market its devices to restaurants embracing curbside pickup that needed a quick — and relatively contactless — way to get things done. Investors should also note that it launched a medical-grade scanner designed to help hospitals ease the admissions process. Blood? Sweat? Other fluids? No issue. Just quickly scan a hospital ID bracelet with a Socket Mobile device and start treatment.
Why Socket Mobile Stock Is Surging Today
The Socket Mobile story is simply a nice one. Investors have continued to reward the most innovative of companies — companies that show they can deliver for shareholders and their communities during tough times. Just as Socket Mobile has pivoted to restaurant and hospital customers, we have seen digital-savvy restaurants like Chipotle (NYSE:CMG) rocket higher. Therefore, it should be no surprise that investors like the Q3 report from the barcode company.
Looking to the future, there is also hope as some brick-and-mortar retail comes back online. However, the death of physical retail may just be accelerating now, it is good that Socket Mobile has found new ways to attract business. This adaptive spirit should help it in future quarters.
There is also one thing to note. The Q3 report was not perfect. Due to business delays from the coronavirus, the company was unable to complete its annual review process for goodwill impairment. That means the numbers could change slightly, and right now, they come with an asterisk. As always, this means investors should do their due diligence when pursuing a hot stock.
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On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer for InvestorPlace.com.