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Here's Why You Should Avoid Investing in iRobot Stock Right Now
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iRobot Corporation (IRBT - Free Report) has failed to impress investors with its recent operational performance due to decreased demand for products. Also, given the company’s extensive international presence, foreign currency headwind is an added uncertainty.
Headquartered in Bedford, MA, iRobot designs and manufactures robots for home cleaning, most notably the Roomba vacuum cleaner. It also produces devices for mopping, such as the Braava. The products are primarily sold via several distribution channels, which include chain stores, national retailers and online through iRobot's website as well as value-added distributors and resellers.
Let’s discuss the factors that may continue taking a toll on the firm.
Factors Affecting IRBT
Business Weakness: iRobot’s revenues declined 29.7% year over year in the second quarter of 2024 due to decreased demand for products and increased competition in the market. Also, for solo and other products, revenues declined 52.1% year over year in the same period. Units shipped were 300 thousand, down 55.4% year over year. Owing to the soft demand across its businesses, iRobot expects revenues to be in the range of $765-$800 million in 2024, indicating a year-over-year decrease of 12.2%.
Rising Promotional Activities: Increasing promotional activities and higher losses related to purchase commitments with the contract manufacturers are affecting the company’s operating margin performance. In the second quarter, iRobot recorded an adjusted operating loss of $61.1 million. The adjusted operating margin was (29%). In 2024, it expects to incur an operating loss in the range of $65-$79 million.
Forex Woes: iRobot’s international presence keeps it exposed to the risk of adverse currency fluctuations. This is because a strengthening U.S. dollar may require it to either raise prices or contract profit margins in locations outside the United States. Thus, adverse currency movements are a worry for the company.
iRobot currently carries a Zacks Rank #4 (Sell). In the past year, the stock has lost 80.7% compared with the industry’s 12.2% decline.
The company delivered a trailing four-quarter average earnings surprise of 9.5%. In the past 60 days, the Zacks Consensus Estimate for TTEK’s fiscal 2024 earnings has increased 0.8%.
Atmus Filtration Technologies Inc. (ATMU - Free Report) currently carries a Zacks Rank of 2. ATMU delivered a trailing four-quarter average earnings surprise of 13.4%.
In the past 60 days, the consensus estimate for Atmus’ 2024 earnings has increased 3.1%.
Parker-Hannifin Corporation (PH - Free Report) currently carries a Zacks Rank of 2. PH delivered a trailing four-quarter average earnings surprise of 2.6%.
In the past 60 days, the consensus estimate for Parker-Hannifin’s fiscal 2025 earnings has increased 1.3%.
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Here's Why You Should Avoid Investing in iRobot Stock Right Now
iRobot Corporation (IRBT - Free Report) has failed to impress investors with its recent operational performance due to decreased demand for products. Also, given the company’s extensive international presence, foreign currency headwind is an added uncertainty.
Headquartered in Bedford, MA, iRobot designs and manufactures robots for home cleaning, most notably the Roomba vacuum cleaner. It also produces devices for mopping, such as the Braava. The products are primarily sold via several distribution channels, which include chain stores, national retailers and online through iRobot's website as well as value-added distributors and resellers.
Let’s discuss the factors that may continue taking a toll on the firm.
Factors Affecting IRBT
Business Weakness: iRobot’s revenues declined 29.7% year over year in the second quarter of 2024 due to decreased demand for products and increased competition in the market. Also, for solo and other products, revenues declined 52.1% year over year in the same period. Units shipped were 300 thousand, down 55.4% year over year. Owing to the soft demand across its businesses, iRobot expects revenues to be in the range of $765-$800 million in 2024, indicating a year-over-year decrease of 12.2%.
Rising Promotional Activities: Increasing promotional activities and higher losses related to purchase commitments with the contract manufacturers are affecting the company’s operating margin performance. In the second quarter, iRobot recorded an adjusted operating loss of $61.1 million. The adjusted operating margin was (29%). In 2024, it expects to incur an operating loss in the range of $65-$79 million.
Forex Woes: iRobot’s international presence keeps it exposed to the risk of adverse currency fluctuations. This is because a strengthening U.S. dollar may require it to either raise prices or contract profit margins in locations outside the United States. Thus, adverse currency movements are a worry for the company.
iRobot currently carries a Zacks Rank #4 (Sell). In the past year, the stock has lost 80.7% compared with the industry’s 12.2% decline.
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Stocks to Consider
Some better-ranked companies are discussed below.
Tetra Tech, Inc. (TTEK - Free Report) presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company delivered a trailing four-quarter average earnings surprise of 9.5%. In the past 60 days, the Zacks Consensus Estimate for TTEK’s fiscal 2024 earnings has increased 0.8%.
Atmus Filtration Technologies Inc. (ATMU - Free Report) currently carries a Zacks Rank of 2. ATMU delivered a trailing four-quarter average earnings surprise of 13.4%.
In the past 60 days, the consensus estimate for Atmus’ 2024 earnings has increased 3.1%.
Parker-Hannifin Corporation (PH - Free Report) currently carries a Zacks Rank of 2. PH delivered a trailing four-quarter average earnings surprise of 2.6%.
In the past 60 days, the consensus estimate for Parker-Hannifin’s fiscal 2025 earnings has increased 1.3%.