iRobot Stock is a "Must Buy", and Here's Why

The sky is the limit for this well-positioned technology company

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iRobot Corporation (NASDAQ:IRBT) is a consumer technology and robot company based out of Delaware in the United States. The company is most notably known for their Roomba product, an autonomous home vacuum cleaner. iRobot has posted huge gains since the stock crashed in 2019. Right now, IRBT stock is up a whopping 68% year-to-date, but has the potential to still present a huge opportunity for investors.

iRobot has a market cap of $2.27 billion and a book value of $27.81 per share. Its price-to-book ratio stands at 2.85. The company has a trailing price-earnings (P/E) ratio of 14.76. iRobot's P/E ratio at the moment is 15.04.

iRobot has beat expectations on all four of its most recent earnings reports. In the company's most recent quarter, iRobot beat their target by 158%. The company reported an earnings per share (EPS) of $2.58, beating the expected EPS of $1.00 in a major way. For the company's next quarterly earnings report, iRobot is expected to drop its EPS by $0.21. The company has a trailing 12-month EPS of $5.39.

iRobot Stock IRBT stock price since IPO
iRobot has had consistent annual revenue growth for the past four years. The company grew revenue by approximately $200 million annually between 2016 and 2018, but has slowed its growth rate down to about $100 million per year. The company has grown its total revenue by about 100% since producing $660 million in 2016. iRobot has produced $1.31 billion in revenue over the past 12 months.

iRobot’s net income growth has also remained consistent over the past four years, with 2019 as the singular exception. The company has grown its net income by more than 250% since producing $42 million in 2016. iRobot has produced nearly $154 million in net income over the past 12 months.

iRobot currently has $297 million in cash and $70 million in long-term debt. The company’s balance sheet holds $1.12 billion in total assets and $335 billion in total liabilities. iRobot's total equity stands at $782 million.

IRBT has been well over $100 per share in the past, while the company was producing less revenue and little profit. If the company continues on its current growth path, the stock should have no problem surpassing that mark once again, and at a much better price-earnings ratio. A price-earnings ratio of 15 is an absolute steal for a company whose business model revolves around selling robots for consumer convenience.

Although robot vacuum cleaners and mops may seem a bit boring as far as technology goes, the sky is the limit for iRobot if the company can continue innovating in this booming space. That potential alone should be enough to interest speculative investors. But, just in case that wasn’t enough for you, iRobot Corporation also boasts an impressive balance sheet with $227 million more in cash than it has in long-term debt. Overall, iRobot has huge potential upside for investors and comes with very little downside risk.

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