Loup Ventures On iRobot: 'Expect Multiple Beat And Raise Quarters'

At first glance, December wasn’t the greatest month for iRobot Corporation IRBT. The firm’s primary publicity came in the form of an onslaught from Spruce Point Capital and lukewarm reviews from Citigroup.

But Loup Ventures expects critics will be silenced soon with reports of robust holiday sales.  

The Rating

Loup Ventures and analyst Austin Bohlig does not issue ratings or price targets.

The Thesis

The pricing of iRobot products on Amazon.com, Inc. AMZN increased regularly throughout the December 2017 quarter, suggesting surges in demand, Bohligh said. Pricing also rose beyond the December 2016 rates that correlated with an earnings beat, supporting Bohlig’s projection of a year-over-year sales boost.

The analyst raised his 2017 revenue forecast to $880 million.

He also predicted multiple consensus beats in 2018 on the basis of iRobot's generally conservative guidance, expected 26-percent growth in the robot market and an inflection in the domestic market.

“In addition, we believe the domestic robot market is one of the fastest growing robotic segments, and given iRobot’s positioning and premium tech, we expect the company to sustain 20-percent-plus revenue growth in 2018,” Bohlig said in a Monday note.

Anticipating a March 2018 rollout of robot lawnmowers, which are seen to contribute 5 percent of revenue in the June quarter, Bohlig expects iRobot to outperform Street estimates and resist the rising threat of competition.

“Assuming the lawnmower gets pushed out [until] 2019, we still believe iRobot can grow about 23 percent year-over-year,” Bohlig said. 

Price Action

At the time of publication, iRobot was trading up 0.54 percent at $82.44. 

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Photo courtesy of iRobot.