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IRobot (IRBT) Up 6.9% Since Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for iRobot Corporation (IRBT - Free Report) . Shares have added about 6.9% in that time frame.

Will the recent positive trend continue leading up to its next earnings release, or is IRBT due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Recent Earnings

Premium consumer technology company iRobot reported better-than-expected results for first-quarter 2018.

Earnings/Revenues

Quarterly adjusted earnings came in at 66 cents per share, outpacing the Zacks Consensus Estimate of 50 cents. Also, the bottom line came in higher than the year-ago tally of 52 cents per share.

Revenues in the quarter came in at $217.1 million, beating the Zacks Consensus Estimate of $216 million by a whisker. The top line also improved 28.8% year over year, on the back of stronger sales secured from all end-markets.

Costs/Margins

Cost of sales in the reported quarter was $101.3 million, up 24.8% year over year.  Gross margin was 53.3%, up 150 basis points (bps) year over year.

Total operating expenses in the reported quarter was $90.4 million, up 37.6% year over year. Operating margin was 11.7%, down 110 bps year over year.

Balance Sheet/Cash Flow

Exiting the first quarter, iRobot had cash and cash equivalents of $144.5 million, up from $128.6 million recorded as of Dec 30, 2017. Long-term liabilities came in at $13 million, down from $13.9 million reported at the end of 2017.

In the first three months of 2018, iRobot generated $29.8 million cash from operating activities, up from $26.8 million recorded in the year-ago period. Capital expenditure was $8.7 million compared to $3 million witnessed at the end of first-quarter 2017.

Outlook

iRobot believes higher sales of its state-of-the-art home-robotic products and ongoing marketing programs will aid in strengthening its competency in the near future. Based on the existing market conditions, the company reiterated its revenue guidance for 2018 at $1.05-$1.08 billion, estimating year-over-year growth of 19-22%.

However, the company raised its earnings view for full-year 2018 to the $2.15-$2.40 per share range from the prior outlook of $2.10-$2.35 per share.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to three lower.

iRobot Corporation Price and Consensus

 

iRobot Corporation Price and Consensus | iRobot Corporation Quote

VGM Scores

At this time, IRBT has a nice Growth Score of B, though it is lagging a bit on the momentum front with a C. The stock was also 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.

Based on our scores, the stock is more suitable for growth investors than those looking for value and momentum.

Outlook

Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, IRBT has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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