iRobot: Zacks’ Bull of the Day Play

Although many growth stocks have struggled in this higher risk environment, a few have managed to persevere and could be poised for gains in the near future. This is especially the case in the often-overlooked automation and robotics industry, where companies not only have great growth prospects, but have held up better than many of their peers in the recent burst of market volatility.

Furthermore, companies in this segment actually combine to have a Zacks Industry Rank that is in the top 5% overall, suggesting there are few better choices out there from an industry perspective right now. And if you are wondering which company in particular in the automation space might be the best bet, consider taking a closer look at iRobot (IRBTAnalyst Report).

iRobot in Focus

iRobot has really made a name for itself by developing robots for use in the home in order to complete various cleaning tasks. Their first real big hit was their Roomba brand vacuum robot, though the company has developed a number of other robots in order to help with floor scrubbing, cleaning swimming pools, and gutter cleaning, among others.

In addition to this wide lineup, the company has plenty in development as well. These new segments will focus more on the business and military, diversifying the company’s revenue streams and opening up huge new markets.

Earnings Estimates Looking Up

Analysts also seem to like the company’s prospects in the medium term, as full year earnings estimates have been soaring. In fact, IRBT has seen two revisions higher for the current year in the past 30 days, compared to zero lower in the same time period. We also see a similar trend for the next year time frame, suggesting the longer term future for IRBT is looking increasingly promising.

We have also seen these estimate revisions translate into a higher consensus estimate, with the current year moving from $1.14/share to $1.25/share in the past 30 days, while the next year estimate has gone from $1.37/share to $1.42/share over the same period. With these revisions, IRBT is projected to see strong year-over-year EPS growth, with 43% predicted for this year, and 13% for next year.

And if you are worried about IRBT reaching these goals and meeting analyst expectations, consider their recent history at earnings season. The company has posted an average surprise of close to 14.5% in the past four quarters, while it has a streak of not missing estimates that extends deep into history, as evidenced by this chart below:

Bottom Line

The automation industry has been pretty strong and growth prospects remain solid for this space in both the near and long term. But if you are looking for the best of this space iRobot could be the way to go.

Not only does it have an impressive product lineup, but it is just starting to tap into new markets, suggesting that it still has plenty of room to run. Plus, the company has an amazing track record at earnings season, almost always beating expectations.

If that wasn’t enough, IRBT has also earned itself a Zacks Rank #1 (Strong Buy), and actually just moved up to this strong buy level within in the past week. So if you are looking for a top ranked stock to ride out this recent market volatility, consider IRBT to be an excellent choice.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s