IRobot (IRBT) Q1 Earnings: What's In Store For The Stock?

iRobot Corporation (NASDAQ:) is scheduled to report its first-quarter 2017 earnings after the opening bell on Apr 25, 2017.

Bedford, MA-based iRobot is one of the leading manufacturers of robots worldwide. The company is a leader not only in the domestic arena but also in the field of commercial usage.

Let’s see how things are shaping up prior to this announcement.

Factors at Play

iRobot expects to generate higher revenues in the quarter on the back of stunning market response to new wet floor category products, stronger demand in the Smart Home market, increased penetration of Roomba in the U.S., solid business in certain niche overseas markets like Japan and higher sales of Braava in Asia.

Notably, iRobot is poised to grow on the back of meaningful innovations, strategic marketing programs and diligent restructuring initiatives.

However, the company relies on single source contract manufacturers and hence, its brand status and business performance are both highly dependent on them. For instance, almost all the contract manufacturers of iRobot’s home robotic products belong to China.

iRobot conducts its business in a highly dynamic and competitive technology market. Prominent product or process innovation of major industry rivals might adversely impact its market share in the future. Moreover, the company’s future commercial success highly depends on its ability to penetrate in the consumer home-care market. Hence, iRobot makes constant efforts to reinforce its consumer robotics trade by developing new products at competitive prices. However, such developments involve a lot of risk, cost and time. Inability to introduce new products or deliver the same within appropriate time might considerably hurt the company’s top-line growth in the quarters ahead.

Earnings Whispers

Our proven model does not conclusively show that iRobot is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as we will see below.

Zacks ESP: iRobot currently has an Earnings ESP of -3.85%. This is because the Zacks Consensus Estimate of 26 cents is higher than the Most Accurate estimate of 25 cents.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: iRobot’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.

Note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Caterpillar Inc. (NYSE:) , with an Earnings ESP of +9.84% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Anixter International Inc. (NYSE:) , with an Earnings ESP of +2% and a Zacks Rank #3.

C.H. Robinson Worldwide, Inc. (NASDAQ:) , with an Earnings ESP of +2.50% and a Zacks Rank #3.

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C.H. Robinson Worldwide, Inc. (CHRW): Free Stock Analysis Report

Anixter International Inc. (AXE): Free Stock Analysis Report

iRobot Corporation (IRBT): Free Stock Analysis Report

Caterpillar, Inc. (CAT): Free Stock Analysis Report

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