iRobot is an interesting stock. It has at times traded for many times its annual sales on expectations of fast growth. Fast growth (>20%/yr) has followed, and now the company is trading for less than expected 2008 revenue! ($286 million stock value at all time low vs. $295 million-$305 million sales).
That's all despite the fact that the company is poised to see substantial growth in the military market with the emergence of the SUGV in the next two years and continues to see strong worldwide growth in Roomba and Scooba as they expand direct sales across the globe.
Crazy.
Tags: iRobot, IRBT
Wednesday, July 16, 2008
IRBT trading for less than sales!
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IRBT News
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3 comments:
IMHO, iRobot has a PR problem. Ameritrade considers iRobot's stock to be part of the "Appliance and Tool Industry" sector instead of the defense sector or something more appropriate. IMHO, the company is in a tough position right now due to high fuel costs. In the consumer market, a Roomba is a luxury item so when people tighten their belts, stuff like this is ruled out. The military is also sh*tcanning a lot of purchasing in favor of spending money on fuel. On top of that, the impending election could make defense spending worse.
Wallstreet's SHOW ME THE MONEY philosophy is kicking IRBTs butt because IRBT hasn't. The current low volume shows there isn't many buyers -- or sellers for that matter.
I sure hope current prices aren't indicative of some looming bad news...
From a market sector POV, a company like Black & Decker or DeWalt would be a better investment since a lot more people need drills and such than Loojs. Roombas and Scoobas aren't things people are going to spend their Economic Stimulus Checks on. These are not iPod-like products with mass appeal. What iRobot needs to think about is a product that people would become seriously addicted to.
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