iRobot Stock Gains From Rising Demand for Cleaning Robots
Our world is being driven more and more by machines, and our homes are no different. As everyone gets busier, it becomes more tedious or sometimes impossible to spend time cleaning the house.
iRobot Corporation (NASDAQ:IRBT) makes the task easier by providing a helping hand in daily cleaning. IRBT stock has been rising due to the strong global trend of cleaning robots and home automation.
iRobot is the leader in home robotics. In particular, it’s the leading maker of vacuum-cleaning and floor-mopping robots in the world. Its robots are transforming the way people clean their homes on the inside and outside.
Apart from its award-winning vacuum-cleaning robot “Roomba,” the company’s popular robots include the “Scooba” floor-scrubbing robot, the “Brava” floor-mopping robot, and the “Mirra” pool-cleaning robot. iRobot stock has been gaining on the rising popularity of those products.
The company has sold more than 20 million home robots worldwide. And the momentum is expected to continue as more households adopt robots in the coming years.
As per a recent report by MarketsandMarkets Research Private Ltd., the mobile robot market is likely to grow from $18.7 billion in 2018 to $54.1 billion by 2023. This represents a compound annual growth rate (CAGR) of 23.7%. North America is expected to comprise the largest share of the mobile robot market in 2018. (Source: “Mobile Robots Market worth $54.1 billion by 2023,” MarketsandMarkets Research Private Ltd., last accessed December 6, 2018.)
iRobot’s improving business performance has been pushing IRBT stock to new highs as of late. Its strong showing has been driven by the company’s continued transformation into a global consumer robot company.
It has maintained Roomba’s leadership in the robotic vacuum cleaner segment while positioning itself as a significant player in the emerging smart home market.
iRobot’s vision is to create an ecosystem of connected robots that are designed to work with other devices. This is how the company will create more possibilities for new features and empower the smart home. This bodes well for iRobot stock in the near future.
The company recently announced impressive third-quarter financial results, posting record revenue of $265.0 million. Strength in the major regions pushed up revenue growth to 29% year-over-year. In the U.S., there was significant year-over-year growth of 45%, on account of the successful launch of the “Roomba i7/i7+” and the “Roomba e5.” (Source: “iRobot Reports Third-Quarter Financial Results,” iRobot Corporation, October 23, 2018.)
iRobot is optimistic about the holiday season and has increased its guidance for full-year 2018.
The home robot company has been growing its annual revenue, on the back of increasing demand for its products. Its total revenue for 2017 was $883.9 million, which was a 33.8% increase from the 2016 revenue of $660.6 million.
Last year, the company also launched its new connected robots, “Roomba 690” and “Roomba 890,” thereby bringing the benefits of connectivity to more consumers.
Improving business has had a positive impact on IRBT stock, which has gone up by almost 45% over the past year. The stock has gained about 25% since we covered it in Profit Confidential in October 2017.
The following chart shows this impressive growth.
Chart courtesy of StockCharts.com
iRobot stock went through a rough patch early this year but is on its way to deliver more double-digit returns.
iRobot is the leader in consumer robotics, and its position is unlikely to change in the coming years. Although the competition is increasing, iRobot has the technology and the scale to remain a dominant player for a long time.
The demand for iRobot’s products will likely continue to grow, with a deeper household penetration of Roomba and other products globally.
And the best part is that iRobot will not stop at just making cleaning robots. It will have numerous opportunities to continue expanding its product portfolio as it emerges as a strategic player in the smart home market.
Investors should not miss this high-growth opportunity and may want to consider IRBT stock on any sign of weakness.