We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
iRobot Corp (IRBT - Free Report) is a Zacks Rank #1 (Strong Buy) that designs, builds and sells robots products to the consumer market. The company makes the popular Roomba robot vacuum, but also makes mops, lawn mowers and a coding robot to help children learn coding.
About the Company
iRobot is headquartered in Beford, MA and employs over 1,100. The company was founded in 1990 and sells its products in chain stores, national retailers and online.
The company is valued at $2.3 billion and has a Forward PE of 23. IRBT holds a Zacks Style Score of “A” in Growth, but “F” in momentum.
Q3 Earnings
Last week the company reported EPS and saw a big beat on both the top and bottom lines. Q3 came on at $2.58 v the $0.90 expected, a 183% beat above Zacks estimates. Revenues came in at $413M v the $314M expected and the company hiked its FY20 guidance. Domestic revenues are about half the total revenues and were up 75% year over year.
The beat on earnings is something investors are used to, as IRBT hasn’t missed in four years.
A negative in the report showed gross margins were slightly lower, with the company now seeing 48.3% v 48.5% from last year. The acceleration in demand for iRobot products began when people started working from home.
CEO Colin Angle had the following comments on the quarter:
"Customer response to our Genius platform and the i3 Series has been excellent thus far...We saw revenue in each geography exceed our original plans with notable strength in U.S. order levels."
Estimates and Upgrades
Looking at estimates for the current year, we see them going higher. Over the last 30 days estimates have ticked from $2.45 to $3.53, a gain of 20%. For next year, estimates have gone up by 16% over the same time frame.
After earnings, the company saw some upgrades. Raymond James raised the stock to an Outperform with a $98 price target. Northland Capital reiterated its Outperform and price target of $100.
Stock Sells Off
The headlines number on earnings brought excitement after hours, with the stock trading above $110. However, next year brings uncertainty on a variety of issues, so the stock sold off, falling back to $80. Margins are an issue along with the potential for tariffs, so investors took profits on the move higher.
While there are risks, the company’s sales growth and earnings are impressive. After the big sell off, it looks like investors have stepped in at technical support and see longer-term opportunity.
The Technical Take
The stock fell all the way down to $30 during the March sell off, but then rallied above $70 where it sat for over three months. The recent quarter looked like a breakout, but now the stock is back to the low $80s.
This $80 level offers 50-day Moving average support and looks to be holding. For investors that want a larger pullback, the 200-day moving average is $67.
If the bulls can get above the $92 level, this would break the 61.8% retracement from the earnings highs and give us targets back at that $110 after hours high.
In Summary
Earnings were great, but there are some risks as we head into 2021. However, the momentum behind the company product line is strong and the revenues numbers show growth both internationally and at home.
Investors should watch the technical support at current levels and if buyers defend enter with targets above $100.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Bull of the Day: iRobot Corp (IRBT)
iRobot Corp (IRBT - Free Report) is a Zacks Rank #1 (Strong Buy) that designs, builds and sells robots products to the consumer market. The company makes the popular Roomba robot vacuum, but also makes mops, lawn mowers and a coding robot to help children learn coding.
About the Company
iRobot is headquartered in Beford, MA and employs over 1,100. The company was founded in 1990 and sells its products in chain stores, national retailers and online.
The company is valued at $2.3 billion and has a Forward PE of 23. IRBT holds a Zacks Style Score of “A” in Growth, but “F” in momentum.
Q3 Earnings
Last week the company reported EPS and saw a big beat on both the top and bottom lines. Q3 came on at $2.58 v the $0.90 expected, a 183% beat above Zacks estimates. Revenues came in at $413M v the $314M expected and the company hiked its FY20 guidance. Domestic revenues are about half the total revenues and were up 75% year over year.
The beat on earnings is something investors are used to, as IRBT hasn’t missed in four years.
A negative in the report showed gross margins were slightly lower, with the company now seeing 48.3% v 48.5% from last year. The acceleration in demand for iRobot products began when people started working from home.
CEO Colin Angle had the following comments on the quarter:
"Customer response to our Genius platform and the i3 Series has been excellent thus far...We saw revenue in each geography exceed our original plans with notable strength in U.S. order levels."
Estimates and Upgrades
Looking at estimates for the current year, we see them going higher. Over the last 30 days estimates have ticked from $2.45 to $3.53, a gain of 20%. For next year, estimates have gone up by 16% over the same time frame.
After earnings, the company saw some upgrades. Raymond James raised the stock to an Outperform with a $98 price target. Northland Capital reiterated its Outperform and price target of $100.
Stock Sells Off
The headlines number on earnings brought excitement after hours, with the stock trading above $110. However, next year brings uncertainty on a variety of issues, so the stock sold off, falling back to $80. Margins are an issue along with the potential for tariffs, so investors took profits on the move higher.
While there are risks, the company’s sales growth and earnings are impressive. After the big sell off, it looks like investors have stepped in at technical support and see longer-term opportunity.
The Technical Take
The stock fell all the way down to $30 during the March sell off, but then rallied above $70 where it sat for over three months. The recent quarter looked like a breakout, but now the stock is back to the low $80s.
This $80 level offers 50-day Moving average support and looks to be holding. For investors that want a larger pullback, the 200-day moving average is $67.
If the bulls can get above the $92 level, this would break the 61.8% retracement from the earnings highs and give us targets back at that $110 after hours high.
In Summary
Earnings were great, but there are some risks as we head into 2021. However, the momentum behind the company product line is strong and the revenues numbers show growth both internationally and at home.
Investors should watch the technical support at current levels and if buyers defend enter with targets above $100.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>