Yahoo Finance iRobot Corporation (NASDAQ:IRBT) Analysts Are Cutting Their Estimates: Here's What You Need To Know
There's been a major selloff in iRobot Corporation (NASDAQ:IRBT) shares in the week since it released its quarterly report, with the stock down 25% to US$7.64. The statutory results were mixed overall, with revenues of US$166m in line with analyst forecasts, but losses of US$2.41 per share, some 6.9% larger than the analysts were predicting. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
See our latest analysis for iRobot
Taking into account the latest results, the three analysts covering iRobot provided consensus estimates of US$774.3m revenue in 2024, which would reflect a noticeable 4.4% decline over the past 12 months. Losses are predicted to fall substantially, shrinking 58% to US$2.82. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$838.9m and losses of US$2.64 per share in 2024. Overall it looks as though the analysts are negative in this update. Although revenue forecasts held steady, the consensus also made a moderate increase in to its losses per share forecasts.
The consensus price target fell 7.4% to US$12.97, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on iRobot, with the most bullish analyst valuing it at US$14.00 and the most bearish at US$11.94 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One more thing stood out to us about these estimates, and it's the idea that iRobot's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 8.6% to the end of 2024. This tops off a historical decline of 6.1% a year over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 5.8% annually. So while a broad number of companies are forecast to grow, unfortunately iRobot is expected to see its revenue affected worse than other companies in the industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of iRobot's future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple iRobot analysts - going out to 2025, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 5 warning signs for iRobot (2 make us uncomfortable) you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
