Analysts: iRobot Will Struggle Due To Trade Issues, Increasing Competition

Shares of iRobot Corporation IRBT were trading lower Wednesday after the company narrowed its fiscal year 2019 revenue guidance from a range of $1.2-$1.25 billion to a range of $1.2-$1.21 billion and its operating income guidance from a range of $75-$100 million to $75-$80 million.

Piper Jaffray: Weak Guidance 

While iRobot’s third-quarter results exceeded expectations, the initial outlook for the fourth-quarter and 2020 was fairly dismal, Piper Jaffray analyst Troy Jensen said in a Tuesday note. 

“We believe international growth of 25% (Europe 27%, Japan 40%) provides a glimpse of what growth could look like without tariff increases, but until U.S./China trade issues get resolved, we believe IRobot will continue to struggle in their biggest market, making it a hard stock to own.” 

Piper Jaffray reiterated a Neutral rating on iRobot. 

RayJay: Robot War Apocalypse 

For iRobot, decelerating growth in its biggest market, increasing competition and declining gross margins are the three horsemen of the robot war apocalypse, and they are coming to fruition, Raymond James analyst Brian Gesuale said in a Wednesday note. 

“These three factors will likely cause a major reset to the $3 2020 consensus EPS estimate and puts our Street low (prior to the announcement) 2020 EPS of $2.40 at significant risk of a sub-$1.75 estimate,” the analyst said. 

Raymond James reiterated an Underperform rating on iRobot. 

Price Action 

The stock was trading down 11.97% at $47.56 at the time of publication. 

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Photo courtesy of iRobot.