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Is IRobot Corporation About To Take Off?

Jul. 08, 2013 1:50 PM ETiRobot Corporation (IRBT)
Carl Cachia profile picture
Carl Cachia's Blog
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Long Only, Short Only, Long/Short Equity, Deep Value

Seeking Alpha Analyst Since 2009

I work in the medical and healthcare field so my focus is mainly on Biotech stocks. I try to find the next Celgene, the next Pharamcylics if possible. Been a trader and investor for 13 years. Love the game, and I hope you enjoy my articles on here. Good luck with your investments and I look forward to all of your comments and suggestions. Read more here http://seekingalpha.com/author/carl-cachia/articles

A stock that is coming consistently on our watchlist is iRobot Corporation (IRBT). Fundamentally, the picture is a bright one and the stock has been on a huge uptrend. A period of consolidation might occur but the stock is poised for new highs anytime.

The story

IRBT designs and builds robots that as the company says "that makes a difference". The company designs products that have a place both in the home, in defense and security and lately also in the medical field. I believe the latest product (RP-VITA) in the medical field is one that will take the company to new levels.


The RP-VITA is the first remote presence solution for patient care. The robot features state-of-the-art mapping and obstacle detection and avoidance technology, a simple iPad user interface for control and interaction and the ability to interface with diagnostic devices and access electronic medical records.

The future for this product

The future for IRBT is very exciting. There are a number of new products that will follow the potential of the RP-VITA.

Adapted from irobot.com

These robots are being planned to be introduced in 2014. Potential applications include their use in security environments, material transportation, caregiver support, factory inspection and in mobile kiosks.

Fundamental analysis

The company is currently valued at $1.14b. The company has $137m in cash with 0 debt making the possibility of a secondary issuing of shares remote. The float is 27m, with a high 8.4% short.

The latest earning report were stellar. Revenues came in at $106.2m, which was higher than what analysts were expecting. GAAP reported sales were also 8.6% higher than the prior-year quarter. Earnings per share came in at $0.30 which was $0.12 higher than what analysts were expecting.

Technical analysis

Weekly chart is a thing of beauty. A nice trend. Expect this to continue going forward.


There are a number of factors that makes IRBT a strong buy, even after this huge rise. There is improvement of gross margins, strategic alliances with big companies (Read here) and extensive and new product line make IRBT a stock to own for the future. I will continue to add on any dips in prices.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in IRBT over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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