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iRobot Fortifies Business in Europe With Robopolis Buyout
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iRobot Corporation (IRBT - Free Report) fortified its European business by successfully acquiring the company’s largest distributor in the continent — Robopolis SAS (Robopolis) — for $141 million.The final buyout price of the deal, currently subject to preliminary adjustments, will likely be settled by first-quarter 2018.
Shares of this Zacks Rank #3 (Hold) company have yielded a return of 20.2% in the last six months, outperforming 15.3% growth recorded by the industry.
Notably, the company’s earnings are anticipated to grow nearly 20% in the next three to five years.
Inside the Headlines
Robopolis is a Lyon, France-based distributor of premium personal robots. Being the primary distributer, the company generated approximately half of iRobot’s Europe, Middle East and African (EMEA) revenues in 2016.
iRobot noted that the Robopolis buyout will further strengthen its control over European end markets. This, in turn, is likely to enhance the market penetration of iRobot’s robotic vacuum cleaners in Europe.
Almost 25% of iRobot’s consumer business revenues in 2016 were generated from the EMEA region. We believe the aforementioned buyout will further boost this proportion, in the near future.
Our Take
iRobot is poised to grow on the back of strong innovation, sturdy hold on proprietary rights, elevated sales and strategic inorganic moves. On Jul 25, management raised its revenue guidance for full-year 2017 from $780-$790 million to $815-$825 million. Also, the company’s full-year earnings guidance has been revised upward from $1.45-$1.70 per share to the $1.80-$2.00 per share range.
However, we believe dynamic nature of the technology market, stiff industry rivalry and huge dependence on single-source contract manufacturers might curb iRobot’s near-term prospects.
Stocks to Consider
Better-ranked stocks in the same space are listed below:
Applied Industrial Technologies, Inc. (AIT - Free Report) also carries a Zacks Rank #2 and has an average positive earnings surprise of 10.10% for the trailing four quarters.
Alamo Group, Inc. (ALG - Free Report) , which carries a Zacks Rank #2 at present, generated an average positive earnings surprise of 0.51% during the same time frame.
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Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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iRobot Fortifies Business in Europe With Robopolis Buyout
iRobot Corporation (IRBT - Free Report) fortified its European business by successfully acquiring the company’s largest distributor in the continent — Robopolis SAS (Robopolis) — for $141 million.The final buyout price of the deal, currently subject to preliminary adjustments, will likely be settled by first-quarter 2018.
Shares of this Zacks Rank #3 (Hold) company have yielded a return of 20.2% in the last six months, outperforming 15.3% growth recorded by the industry.
Notably, the company’s earnings are anticipated to grow nearly 20% in the next three to five years.
Inside the Headlines
Robopolis is a Lyon, France-based distributor of premium personal robots. Being the primary distributer, the company generated approximately half of iRobot’s Europe, Middle East and African (EMEA) revenues in 2016.
iRobot noted that the Robopolis buyout will further strengthen its control over European end markets. This, in turn, is likely to enhance the market penetration of iRobot’s robotic vacuum cleaners in Europe.
Almost 25% of iRobot’s consumer business revenues in 2016 were generated from the EMEA region. We believe the aforementioned buyout will further boost this proportion, in the near future.
Our Take
iRobot is poised to grow on the back of strong innovation, sturdy hold on proprietary rights, elevated sales and strategic inorganic moves. On Jul 25, management raised its revenue guidance for full-year 2017 from $780-$790 million to $815-$825 million. Also, the company’s full-year earnings guidance has been revised upward from $1.45-$1.70 per share to the $1.80-$2.00 per share range.
However, we believe dynamic nature of the technology market, stiff industry rivalry and huge dependence on single-source contract manufacturers might curb iRobot’s near-term prospects.
Stocks to Consider
Better-ranked stocks in the same space are listed below:
AGCO Corporation (AGCO - Free Report) currently carries a Zacks Rank #2 (Buy) and has an average positive earnings surprise of 39.70% for the last four quarters. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Applied Industrial Technologies, Inc. (AIT - Free Report) also carries a Zacks Rank #2 and has an average positive earnings surprise of 10.10% for the trailing four quarters.
Alamo Group, Inc. (ALG - Free Report) , which carries a Zacks Rank #2 at present, generated an average positive earnings surprise of 0.51% during the same time frame.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>