Competition from another Boston-area company coupled with iRobot’s (NSDQ:IRBT) divestiture of its defense and security business may be factors in investor skittishness and iRobot’s falling stock price.
SharkNinja, which in June opened a global headquarters in nearby Needham, Mass.,developed a home-cleaning robot maker to go head-to-head with iRobot sparking a sell off despite strong third-quarter earning. Shares tumbled 13% yesterday, one day after iRobot posted healthy quarterly financials and easily beat analysts’ earnings projections.
“While we continue to believe iRobot’s product offering remains best in class, we have increasing concerns that competition is inflecting,” Piper Jaffray analyst Troy Jensen wrote in a note to investors. “And while we remain upbeat about the future of home robot adoption and iRobot’s position in this market, we are maintaining our neutral rating.”
Last year, Bedford, Mass.-based iRobot sold its defense and security business for $24.5 million. That line had generated revenue of $55 million for iRobot in 2015, according to a filing with the U.S. Securities & Exchange Commission.
The divestiture was done to “solidify” iRobot’s position in consumer robot market while placing an emphasis on the company’s software development, company executives said at the time.
SharkNinja’s ION Robot navigates floors and carpets and docks and recharges automatically. It sells for $350, compared with iRobot’s line of Roomba robotic cleaners that range from $375 to $899.
iRobot, which was founded in 1990, has sold 18 million consumer robots during the last 15 years. It employed 607 employees as of late 2016, according to an SEC filing. In addition to its Roomba cleaners, iRobot also markets Braava floor-mopping robots and Mirra pool-cleaning robots.
Earlier this week, the company posted third-quarter profits of $22 million, or 76¢ per share, on revenues of $205.3 million for the three months ended Sept. 30, for a bottom-line gain of 13.21% on sales growth of 21.8% compared with Q3 2016.
Wall Street analysts had projected quarterly earnings of 47¢ on sales of $204.5 million. IRBT shares increased nearly 6% in after-market trading, rising to $79.95 apiece.
iRobot shares, which reached $109.78 in July, were just above $64.20 in early trading today, down -1.2%.
Filed Under: The Robot Report
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