Based on recent unemployment data, there are many concerns about whether the U.S. will enter a recession. However, labor markets present interesting news.
News from the New York Federal Reserve report shows that unemployment has shot up sharply, but it’s not as bad as we think. The main reason is that it takes job searchers longer to find jobs. Layoffs have definitely increased in prevalence this year. While the number of unemployed Americans increased by 352,000 last month, 70% of them were temporary layoffs. This implies a quick return to work, and the unemployment numbers have caveats.
These labor markets could be good news for the economy in the future. Here are three robotics stocks investors should look into.
Arbe Robotics (ARBE)
Arbe Robotics (NASDAQ:ARBE) is a software company that makes robotic process automation software. Yahoo! Finance reports 4 analysts predicting a 1-year price range on PATH between $3.00 and $4.00, with an average price target of $3.50.
ARBE’s financials are not great at the moment. While revenue has grown 41.5% year over year, the company has yet to be profitable. However, its forward revenue growth shows promise at 96.5%. Interestingly, the company expects a reversal in its financial situation much further down the line.
A partnership with a European truck manufacturer to incorporate its radar technology into trucks. Additionally, the company has partnered with a top 10 global original equipment manufacturer (OEM) to supply chipsets for developing imaging radar systems. Numbers behind these deals aren’t released, but they should be a substantial number considering the partners. Management expects to see revenue from these deals in late 2025 or early 2026. This robotics stock presents itself as a compelling opportunity for investors with a long-term time horizon.
Rockwell Automation (ROK)
Rockwell Automation(NYSE:ROK) is an industrial automation and digital transformation technologies company. Yahoo! Finance reports 21 analysts predicting a 1-year price range on ROK between $215.00 and $307.00, with an average price target of $271.43.
ROK’s financials look bad at first glance. Revenue is down 8.4%, and net profit margin is down 36.7% year over year. However, the company beat both revenue and EPS estimates. EPS earnings were a standout, with ROK beating EPS estimates by over 30%, showing strong profitability given the current industry climate. Increasing energy costs have contributed to this.
ROK shows promising developments in the future, partnering with renewables startup Sweetech Energy to help Sweetech scale up. The startup utilizes the energy generated from concentrations of salt in seawater traveling to freshwater (osmosis) with a minimal carbon footprint. The company has also launched a new conveyor belt system with higher payload capacity, expanding ROK’s addressable market. With strong developments despite a down industry, ROK is a robotics stock investors should consider.
Teradyne (TER)
Teradyne(NASDAQ:TER) is a manufacturing automation company that operates in a variety of industries and applications. Yahoo! Finance reports 21 analysts predicting a 1-year price range on TER between $110 and $180, with an average price target of $144.19.
TER’s financials are strong, especially considering the tailwinds the automation industry is facing. Revenue has grown 6.6% year over year, and the net profit margin has grown 45.5%. The company has grown assets by 6.9% year over year while shrinking liabilities by 6.6% year over year, demonstrating good balance sheet management. The company demonstrates especially strong handling of operational expenditures with an FCF margin of 15.9%.
Growth in the company’s mobile market has correlated with growth in its memory business. Teradyne’s memory business grew by 30% in the first half of 2024. Management sees an opportunity with AI models on devices with feedback capabilities — camera sensors, for instance — within the mobile market. This poses a growth opportunity for the company in the future, alongside strong financials, making TER a robotics stock to look into.
On the date of publication, Matthew Rodrigues did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
