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Why Is iRobot (IRBT) Up 27% Since Last Earnings Report?
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A month has gone by since the last earnings report for iRobot (IRBT - Free Report) . Shares have added about 27% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is iRobot due for a pullback? 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 drivers.
Second-Quarter 2018 Results
iRobotreported better-than-expected results for second-quarter 2018.
Earnings/ Revenues
Quarterly adjusted earnings came in at 37 cents per share, higher than the year-ago tally of 27 cents. The bottom line also outpaced the Zacks Consensus Estimate by a massive 117.6%.
Revenues in the reported quarter came in at $226.3 million, higher than the year-ago tally of $183.1 million. The top line also exceeded the Zacks Consensus Estimate by 2.3%.
Domestic sales improved 14.6% year over year to $111.5 million. Also, international revenues in the quarter came in at $114.8 million, up 33.7% year over year.
Costs/Margins
Cost of revenues in the second quarter was $108.4 million, up 16.2% year over year. Adjusted gross margin was 52.1%, up 300 basis points (bps) year over year.
Total operating expenses in the quarter came in at $104.6 million, up from $85.8 million recorded in the year-ago period. Operating margin expanded 370 bps year over year to 5.9%.
Cash Flow/Balance Sheet
Exiting the second quarter, iRobot had cash and cash equivalents of $88.8 million, down from $128.6 million recorded as of Dec 31, 2017. Total long-term liabilities were $18 million, down from $23.5 million recorded at the end of 2017.
In first-half 2018, iRobot generated $26.3 million cash from operating activities, down from $32.8 million recorded in the comparable period last year. Capital expenditure was $14.3 million, up from $13.3 million reported in the year-ago period.
Outlook
iRobot believes higher sales of its state-of-the-art home-robotic products and ongoing marketing programs will aid in boosting its competency in the near future. Based on the existing market conditions, the company has revised its revenue guidance for 2018 to $1.06-$1.08 billion from the previous expectation of $1.05-$1.08 billion. Additionally, iRobot has raised its earnings view for the year to $2.30-$2.50 per share, from the prior projection of $2.15-$2.40 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted downward by 31.98% due to these changes.
VGM Scores
At this time, iRobot has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, iRobot has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Why Is iRobot (IRBT) Up 27% Since Last Earnings Report?
A month has gone by since the last earnings report for iRobot (IRBT - Free Report) . Shares have added about 27% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is iRobot due for a pullback? 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 drivers.
Second-Quarter 2018 Results
iRobot reported better-than-expected results for second-quarter 2018.
Earnings/ Revenues
Quarterly adjusted earnings came in at 37 cents per share, higher than the year-ago tally of 27 cents. The bottom line also outpaced the Zacks Consensus Estimate by a massive 117.6%.
Revenues in the reported quarter came in at $226.3 million, higher than the year-ago tally of $183.1 million. The top line also exceeded the Zacks Consensus Estimate by 2.3%.
Domestic sales improved 14.6% year over year to $111.5 million. Also, international revenues in the quarter came in at $114.8 million, up 33.7% year over year.
Costs/Margins
Cost of revenues in the second quarter was $108.4 million, up 16.2% year over year. Adjusted gross margin was 52.1%, up 300 basis points (bps) year over year.
Total operating expenses in the quarter came in at $104.6 million, up from $85.8 million recorded in the year-ago period. Operating margin expanded 370 bps year over year to 5.9%.
Cash Flow/Balance Sheet
Exiting the second quarter, iRobot had cash and cash equivalents of $88.8 million, down from $128.6 million recorded as of Dec 31, 2017. Total long-term liabilities were $18 million, down from $23.5 million recorded at the end of 2017.
In first-half 2018, iRobot generated $26.3 million cash from operating activities, down from $32.8 million recorded in the comparable period last year. Capital expenditure was $14.3 million, up from $13.3 million reported in the year-ago period.
Outlook
iRobot believes higher sales of its state-of-the-art home-robotic products and ongoing marketing programs will aid in boosting its competency in the near future. Based on the existing market conditions, the company has revised its revenue guidance for 2018 to $1.06-$1.08 billion from the previous expectation of $1.05-$1.08 billion. Additionally, iRobot has raised its earnings view for the year to $2.30-$2.50 per share, from the prior projection of $2.15-$2.40 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted downward by 31.98% due to these changes.
VGM Scores
At this time, iRobot has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, iRobot has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.