IRBT Stock: Factors to consider before investing in iRobot

Nearly two years into the pandemic, the most serious problem facing the corporate world is probably the persistent supply chain disruption. Technology companies like iRobot Corporation (NASDAQ: IRBT) are among the worst affected by the crisis, which is aggravated by the ongoing chip shortage.

Stock Performance

Over the past few years, iRobot’s stock went through several ups and downs and entered a downward spiral early this year. The value almost halved since peaking in January and the stock has become less expensive, which can be seen as an investment opportunity. But, experts following the stock are skeptical of its near-term prospects and recommend holding sell/buy decisions for now.

iRobot is an emerging player in a highly promising industry with strong growth opportunities. It should be on the high-growth path once the temporary headwinds settle down – of course, some of them are really tough — thereby creating good shareholder value in the long term.

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Read management/analysts’ comments on iRobot’s Q3 2021 earnings infographic

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Demand Intact

The Bedford, Massachusetts-based robot maker recently launched the new Genius Home Intelligence platform and an update to its highly popular room cleaner robot Roomba, in response to the wide acceptance of its software-centric innovations in artificial intelligence and machine vision. It is estimated that Roomba will continue to be the main growth driver, given the steady growth of consumer robotics and iRobot’s unchallenged dominance in this segment.

Meanwhile, operational delays and additional costs from the supply chain disruption, combined with other COVID-related macroeconomic issues, will remain a drag on performance in the near future. Another major challenge is the continuing semiconductor shortage that can result in the non-fulfillment of orders, especially in the international market.

Q3 Outcome

The tech firm has posted stronger-than-expected earnings and revenues almost in every quarter so far. The trend was maintained in the September quarter when the company reported revenues of $440.7 million, which is up 7% from the year-ago period. Meanwhile, earnings – adjusted for one-off items – dropped sharply to $1.67 per share from $2.58 per share in the third quarter of 2020, hurt by higher costs.

We see consumer robotics following a similar path to personal computers and cell phones, in which the software that powers these products ultimately becomes the primary driver of consumer buying behavior. Genius is critical to our ability to extend our technology leadership and ensure that Roomba and Braava remain the top floor cleaning robots with consumers worldwide.

Colin Angle, chief executive officer of iRobot

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All you need to know about Amazon’s Q3 2021 earnings results

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IRBT started 2021 on a high note and hit record highs in the early weeks of the year, but soon lost momentum and began a losing streak. The stock traded slightly higher on Monday afternoon but stayed below its long-term average.