Robotics Stocks to Buy: iRobot (IRBT)
The first thing you notice about iRobot (IRBT) — the name is pretty cool. The second thing you notice is its significant track record in the robotics business. Over the past 24 years, iRobot has carved out a strong presence delivering robotics to homes, in defense and security, and other applications.
Now, in addition to scrubbing floors and deploying with U.S. troops, the company is turning its attention to the high-growth healthcare sector.
One key tool for that market is the company’s Ava 500 video collaboration robot, which was formally launched for U.S., Canada and some European markets in March. In addition to providing a new level of collaboration for office environments and other facilities, the RP-VITA healthcare robot allows doctors to communicate with patients from virtually anywhere in the world.
Last year, IRBT generated earnings of $27.6 million on a top line of $487.4 million — a 12% revenue gain despite the predicted 30% decline in defense and security market sales.
Despite iRobot’s potential, IRBT stock sports a PEG ratio of just 1.1, which would indicate it’s only slightly overvalued — not bad, especially considering its 18% year-to-date run. But that performance has been choppy, reflected in a 1.9 beta that investors not big on volatility should heed.
IRBT truly more of a bet on robotics in general since its home robot franchise drives earnings, but its move toward the healthcare market provides some additional diversification. And telepresence is an increasingly important segment with Obamacare’s pressures on providers to do more with less.