Shares of iRobot (NASDAQ: IRBT) climbed 21.4% in June, according to data provided by S&P Global Market Intelligence. Most of the gains appear to have stemmed from an investor presentation and subsequent indications that sales for the company's June-ended quarter were tracking above expectations.
Continue Reading Below
On June 5, iRobot gave a presentation for investors at the Baird Global Consumer, Technology & Services Conference in which it outlined growth outlooks for its products and the broader cleaning-robot market. Piper Jaffray analyst Troy Jensen then published a research note on June 12 stating that retail-channel reports suggested that the robotics company's sales for the quarter would likely come in above estimates. The note also gave iRobot an overweight rating and issued a $78 price target on the stock.
At the June investor conference, iRobot broke down figures estimating that it has roughly 85% market share in North America, 31% in the Asian-Pacific geographic segment, and 71% share in the Europe, Middle East, and Africa market. The company still sees big room for expansion for both its Roomba and Braava lines as Internet of Things and smart-home markets expand. And it expects to sell roughly 5 million connected-device units in 2018 -- up from less than 2 million in 2017. The conference also highlighted plans to introduce several new products in the second half of 2018.
And iRobot stock appears to have received a positive catalyst toward the end of the month by way of the legal system. The company announced on June 26 that it had received a favorable preliminary determination upholding claims of intellectual-property violations that it had filed against companies including Hoover, bObsweep, and iLife.
After a rough start to 2018, iRobot has bounced back. It is now roughly even through 2018, and up roughly 100% over the last five years.
The stock lost roughly 23% in February following fourth-quarter results that arrived with profit guidance that was below the market's expectations. But shares have regained ground thanks to an improving sales outlook.
Recent progress on defending its intellectual property is also significant. The risk that competitors will be able replicate iRobot's products, increase pricing pressure, and reduce margins is one of the biggest threats facing the company. iRobot holds 243 U.S. patents and 436 international patents, and the extent to which the company can leverage protections on its technologies could have a big impact on how the cleaning-bot market develops.
10 stocks we like better than iRobotWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and iRobot wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of June 4, 2018