🤖📈 IROBOT ANALYSIS

bananaramana (40)in LAKSHMI • 2 years ago

1
A price target increase by Northland to USD 85 (Market Perform -> Outperform) has given wings here after the USTR (U.S. Trade Representative) confirmed that vacuum robots will be exempt from the still existing punitive tariffs on U.S. imports from China. This is good news for iRobot, as a large part of its production has so far taken place in the People's Republic and positive effects can thus be additionally accelerated by an already ongoing conversion to Malaysia. From 2023 onwards, it should be possible to handle almost the entire production there together with manufacturing partners. Already this year, the share from Malaysia for all vacuum robots for North America is 75%. The earnings call last indicated that the tariffs would negatively impact gross margin by $42 million to $44 million. Following the news, the analyst is now raising his EPS forecast for the current fiscal year from $1.75 to $3.03 per share. The stock still appears attractively valued with a P/E ratio of 1 and a P/E of below 19.

2
Since 17.02.2022 the stock is consolidating within an area ranging from $68.94 - $64.93.

WHAT DO I EXPECT NEXT?

3
I can imagine that the iRobot stock will continue to consolidate within the range and might break out of its consolidation channel as soon as the entire market has strength. If the stock moves above $68.94 with higher than average volume, it might be beneficial to buy the stock. When the stock price closes below its temporary low at $64.93 the trading scenario is invalid.

What are your thoughts? Leave a comment down below 👇