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iRobot (IRBT) Down 5.7% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for iRobot (IRBT - Free Report) . Shares have lost about 5.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is iRobot due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
iRobot Records Q4 Loss, Supply Woes Persist in Q1
iRobot reported weaker-than-expected results for fourth-quarter 2021.
The company’s adjusted loss for the reported quarter was $1.05 per share compared with the Zacks Consensus Estimate of a loss of 88 cents. Also, the quarterly loss compares unfavorably with earnings of 84 cents per share generated in the year-ago quarter.
For 2021, IRBT’s adjusted earnings were $1.34 per share, decreasing 67.6% from the previous year’s $4.14. Also, the bottom line lagged the Zacks Consensus estimate of $1.47 per share.
Revenue Details
The company generated revenues of $455.5 million for the reported quarter, lagging the Zacks Consensus Estimate of $462.3 million by 1.5%. On a year-over-year basis, quarterly revenues decreased 16.4% as shipping delays and shortages of semiconductor chips adversely impacted its performance.
Sales derived from premium and mid-tier robots accounted for 81% of the company’s total robot revenues, higher than 78% in the year-ago quarter.
Sales generated from the e-commerce platform (representing 53% of the reported quarter’s revenues) decreased 26% year over year. The e-commerce platform includes online sources of retailers, IRBT’s app and website, and e-commerce websites. Direct sales to consumers were down 1% year over year to $68 million and represented 14.9% of the quarter’s revenues.
Total product units of 1,657 thousand shipped in the quarter reflected a year-over-year decrease of 24.4%, while average selling prices grew 7.6%. For vacuum products, revenues of $408 million reflected a decline of 15.7% from the year-ago quarter. Units shipped were 1,480 thousand, down 24.2% from the year-ago quarter. Revenues from mopping products decreased 23% from the prior-year quarter to $47 million. Units shipped were 177 thousand, down from 241 thousand recorded in the fourth quarter of 2020.
On a geographical basis, the company sourced 49.6% of revenues from domestic operations and the rest came from the international arena. Domestic revenues totaled $226 million, reflecting a 28.5% decrease from the year-ago quarter. International revenues grew 0.4% from the year-ago quarter to $229.4 million. International operations gained from a 19% revenue increase in Japan, partially offset by a 2% decline in EMEA sales.
For 2021, IRBT’s revenues were $1.57 billion, up 9.4% year over year and in line with the Zacks Consensus Estimate. Connected customers for the year totaled 14 million, reflecting an increase of 44% year over year.
Margin Profile
For the quarter under review, iRobot’s non-GAAP cost of revenues increased 1.1% to $328.9 million, representing 72.2% of revenues compared with 59.7% in the year-ago quarter. Non-GAAP gross profit was $126.6 million, down 42.3% year over year, while the adjusted gross margin decreased 1250 basis points to 27.8%.
Research and development expenses were $40.5 million, down 9.5% year over year. This accounted for 8.9% of revenues compared with 8.2% in the year-ago quarter. Selling and marketing expenses decreased 20.3% year over year to $103.1 million. As a percentage of revenues, it was 22.6% for the reported quarter compared with 23.7% in the prior-year period. General and administrative expenses were $26.6 million, up 2.9% year over year. The figure mirrored 5.8% of the total revenue base compared with 4.7% in the year-earlier quarter.
For the quarter under review, the company recorded an adjusted operating loss of $33.6 million against operating earnings of $30.4 million in the year-ago period. Adjusted operating margin was (7.4%) versus 5.6% in the year-ago quarter.
Tariff costs related to Section 301 totaled $19.1 million for the reported quarter. Its impact on the gross and operating margins was (4.2%).
Balance Sheet and Cash Flow
Exiting fourth-quarter 2021, iRobot had cash and cash equivalents of $201.5 million, decreasing 7.6% from $218 million recorded at the end of third-quarter 2021. Total long-term liabilities were $72 million, up 6.4% sequentially.
In 2021, the company used net cash of $32 million for operating activities against a net cash flow of $232 million in the previous year. Capital used for purchasing property and equipment totaled $29.9 million, decreasing 5.3% year over year.
In 2021, IRBT repurchased shares worth $150 million.
Outlook
For 2022, the company anticipates benefiting from solid product offerings and customer base, innovation capabilities, expansion plans as well as operational initiatives. Supply-chain issues are predicted to adversely impact IRBT’s performance for the first half of the year.
It predicts revenues within $1.75-$1.85 billion, suggesting year-over-year growth of 12-18%. IRBT anticipates non-GAAP earnings to be $1.50-$2.00 per share.
Non-GAAP gross profit is expected to be $622-$3681 million and non-GAAP operating income is predicted to be $44-$60 million. The impact of tariff-related costs of Section 301 is expected to be $42-$44 million.
For the first quarter, the company predicts revenues to be $293-$313 million, suggesting a decline of 3% to growth of 3% from the year-ago period. Operating loss is predicted to be $37-$44 million, while net loss per share is expected to be $1.35-$1.60.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -521.57% due to these changes.
VGM Scores
Currently, iRobot has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise iRobot has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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iRobot (IRBT) Down 5.7% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for iRobot (IRBT - Free Report) . Shares have lost about 5.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is iRobot due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
iRobot Records Q4 Loss, Supply Woes Persist in Q1
iRobot reported weaker-than-expected results for fourth-quarter 2021.
The company’s adjusted loss for the reported quarter was $1.05 per share compared with the Zacks Consensus Estimate of a loss of 88 cents. Also, the quarterly loss compares unfavorably with earnings of 84 cents per share generated in the year-ago quarter.
For 2021, IRBT’s adjusted earnings were $1.34 per share, decreasing 67.6% from the previous year’s $4.14. Also, the bottom line lagged the Zacks Consensus estimate of $1.47 per share.
Revenue Details
The company generated revenues of $455.5 million for the reported quarter, lagging the Zacks Consensus Estimate of $462.3 million by 1.5%. On a year-over-year basis, quarterly revenues decreased 16.4% as shipping delays and shortages of semiconductor chips adversely impacted its performance.
Sales derived from premium and mid-tier robots accounted for 81% of the company’s total robot revenues, higher than 78% in the year-ago quarter.
Sales generated from the e-commerce platform (representing 53% of the reported quarter’s revenues) decreased 26% year over year. The e-commerce platform includes online sources of retailers, IRBT’s app and website, and e-commerce websites. Direct sales to consumers were down 1% year over year to $68 million and represented 14.9% of the quarter’s revenues.
Total product units of 1,657 thousand shipped in the quarter reflected a year-over-year decrease of 24.4%, while average selling prices grew 7.6%. For vacuum products, revenues of $408 million reflected a decline of 15.7% from the year-ago quarter. Units shipped were 1,480 thousand, down 24.2% from the year-ago quarter. Revenues from mopping products decreased 23% from the prior-year quarter to $47 million. Units shipped were 177 thousand, down from 241 thousand recorded in the fourth quarter of 2020.
On a geographical basis, the company sourced 49.6% of revenues from domestic operations and the rest came from the international arena. Domestic revenues totaled $226 million, reflecting a 28.5% decrease from the year-ago quarter. International revenues grew 0.4% from the year-ago quarter to $229.4 million. International operations gained from a 19% revenue increase in Japan, partially offset by a 2% decline in EMEA sales.
For 2021, IRBT’s revenues were $1.57 billion, up 9.4% year over year and in line with the Zacks Consensus Estimate. Connected customers for the year totaled 14 million, reflecting an increase of 44% year over year.
Margin Profile
For the quarter under review, iRobot’s non-GAAP cost of revenues increased 1.1% to $328.9 million, representing 72.2% of revenues compared with 59.7% in the year-ago quarter. Non-GAAP gross profit was $126.6 million, down 42.3% year over year, while the adjusted gross margin decreased 1250 basis points to 27.8%.
Research and development expenses were $40.5 million, down 9.5% year over year. This accounted for 8.9% of revenues compared with 8.2% in the year-ago quarter. Selling and marketing expenses decreased 20.3% year over year to $103.1 million. As a percentage of revenues, it was 22.6% for the reported quarter compared with 23.7% in the prior-year period. General and administrative expenses were $26.6 million, up 2.9% year over year. The figure mirrored 5.8% of the total revenue base compared with 4.7% in the year-earlier quarter.
For the quarter under review, the company recorded an adjusted operating loss of $33.6 million against operating earnings of $30.4 million in the year-ago period. Adjusted operating margin was (7.4%) versus 5.6% in the year-ago quarter.
Tariff costs related to Section 301 totaled $19.1 million for the reported quarter. Its impact on the gross and operating margins was (4.2%).
Balance Sheet and Cash Flow
Exiting fourth-quarter 2021, iRobot had cash and cash equivalents of $201.5 million, decreasing 7.6% from $218 million recorded at the end of third-quarter 2021. Total long-term liabilities were $72 million, up 6.4% sequentially.
In 2021, the company used net cash of $32 million for operating activities against a net cash flow of $232 million in the previous year. Capital used for purchasing property and equipment totaled $29.9 million, decreasing 5.3% year over year.
In 2021, IRBT repurchased shares worth $150 million.
Outlook
For 2022, the company anticipates benefiting from solid product offerings and customer base, innovation capabilities, expansion plans as well as operational initiatives. Supply-chain issues are predicted to adversely impact IRBT’s performance for the first half of the year.
It predicts revenues within $1.75-$1.85 billion, suggesting year-over-year growth of 12-18%. IRBT anticipates non-GAAP earnings to be $1.50-$2.00 per share.
Non-GAAP gross profit is expected to be $622-$3681 million and non-GAAP operating income is predicted to be $44-$60 million. The impact of tariff-related costs of Section 301 is expected to be $42-$44 million.
For the first quarter, the company predicts revenues to be $293-$313 million, suggesting a decline of 3% to growth of 3% from the year-ago period. Operating loss is predicted to be $37-$44 million, while net loss per share is expected to be $1.35-$1.60.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -521.57% due to these changes.
VGM Scores
Currently, iRobot has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise iRobot has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.