3 Reasons Not to Worry About iRobot This Week
Earnings: What Wall Street was expecting
The Street was expecting EPS of $0.22 in the quarter, down from earnings of $0.28 per share a year ago. Analysts were looking for revenue of $142.5 million.Analysts didnt have high expectations for iRobot heading into its Q2 earnings.iRobot Roomba. Source: iRobot.
Earnings: What iRobot delivered
The company generated a profit of $0.28 per share, which beat estimates for the period. Revenue climbed to $139.8 million, missing analysts expectations. iRobots revenue missed the mark, despite strong earnings.iRobot pool cleaning bot. Source: iRobot.
Looking beyond quarterly results
Quarterly results only give you a piece of the picture. However, a deeper look uncovers a handful of key developments that could drive the stock higher in the quarters to come. The following slides outline three catalysts for the stock going forward.
1. New products are selling like hotcakes
iRobot posted double-digit revenue growth in its home robot business in the quarter. Management expects home robot unit to achieve 25% yoy revenue growth in the remainder of 2014 up from just 17% in the first half of the year. iRobots growing family of home bots. Source: iRobot.
2. Remote presence bots gaining momentum
The companys remote presence business generated $1.4 million in revenue in Q2, according to data from Morningstar. This could be a major growth driver for the company going forward as iRobot only recently began shipping its Ava 500 bots to customers.
iRobots Ava 500 Remote presence bot. Source: iRobot.
3. International sales growth
International sales were up more than 19% in the second quarter. This trumped domestic revenue growth of just 7% in the period. iRobots operations in China are just starting to take hold, which should create a growth channel going forward. iRobots Ava 500 Remote presence bot. Source: iRobot.
Foolish final thoughtsWith shares of iRobot trading more than 25% below the stocks 52-week high, this could be a smart time for patient investors to hitch a ride on iRobots longer-term growth story. Not only does iRobot operate in the fast-growing sector of robotics, but it also has key catalysts like international growth and new product innovations working on its behalf today.
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