irobot stock down 40%. BUY NOW?

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Wellgood noodlers and gentlemen and welcome into this week’s edition of damn that stock got tore up a featuring our robot the maker though roomba vacuum cleaner the vacuum cleaner that vacuums my house every monday wednesday and friday that is what company we’re talking about here today they also make some devices that clean hard floors tile floors things like that

Okay this stock got tore up this past week okay yesterday it was down close to 32 percent guys yesterday okay and today it went down to around another 6 5 or 6 percent today this talk has you know been from a hundred something dollars not that long ago to now it’s in the fifty dollar range okay and this comes after basically they announced earnings that were not

Up to what wall street had expected okay so they reported numbers here including a negative forty one cent impact due to us tax code changes a lot of companies have had that happen to them basically these one-time effects of the tax code changes but its outlook for revenue growth is slowing to a range of about 20 percent for 2018 that’s not bad i mean 20 percent

Is not bad with a forecast of annual revenue of about one point zero five billion to one point zero eight billion dollars which appears to be the source of disappointment in 2017 i robots revenue surged 34 percent on an annual basis to 884 million and soared 54 percent in the fourth quarter they just reported to three hundred and twenty seven million dollars so

Those are very very impressive numbers there okay the company did show a large increase in expenses with the selling and marketing expenses jumping as almost 71 million dollars in the fourth quarter up from forty eight million in the year ago quarter okay guys investors were expecting marketing to increase during the fourth quarter and holiday season but spending

Was higher than expected okay well the company basically expects double-digit revenue growth in all regions as we continue to evolve and extend our proven sales and marketing initiatives or an overseas market said call an angle chairman and chief executive officer of irobot in a statement wednesday in the us we expect continued strong sales following our forty

Percent-plus growth in 2017 guys so this company has been on a tear this past year it’s just growing like insane okay i robot for those you guys that do not know they were the originators of the robotic vacuum cleaner they were the first ones to really bring something to market and do it successfully and they’ve had a dominant market share for a long long time

Of the robotic vacuum cleaner business okay and that’s basically the the way we’re going okay the whole you know old stand up you know they used to watch your mom vacuum the house with and you know she’d go around that whole deal like that’s in the past okay like we’re we’re moving on from that in my opinion if you go to stores if there’s anything such as like

Physical restored to retail stores in 10 or 15 years but if you go to a physical retail store and you try to look for like upright vacuums 10 to 15 years from now like good luck trying to find one like they’re gonna be pretty much extinct everybody’s kind of moving in this robotic game i remember we jumped on board it was probably bout four or five years ago why

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Because i own some irobot stock back then and i bought in and so i want to try their product so i bought you know roomba back then then we upgraded a few years ago to a new model and whatnot now irobot does have a significant competitor now at this point they’ve had a lot of competitors okay samsung’s come in this space they’ve had dicing come in this space even

A lot of competitors but those competitors really trying to you know like compete on the very very high-end okay shark has come in now and they’re trying to compete on the very low-end okay they’re trying to compete on the very low end and they’re trying to attack there so with a product that is considered pretty close to premium product right but at a much lower

Price so we look here the shark eye on robots 750 vacuum with wi-fi connectivity and voice control they’re pricing that at about three seventy nine on their website okay so which means probably some retailers you can probably get it for less than three seventy nine right that’s what made you competitor now irobot does have a pretty relatively strong i guess you

Say competitive moat for pricing because they have products all across the board okay they got a two hundred $99 roomba the end they’ve got it all the way up to eight hundred and ninety nine dollars okay so they really have their bases covered as far as pricing goes and kind of like you know some entry-level products for people that maybe aren’t looking and you

Know for as many features and whatnot and they obviously have probably the premier robotic vacuum cleaner out there okay there’s really nothing that could touch the 980 as far as what’s in the market currently all right so that is good for them but at the same time shark eocene that someone that could be a potential huge threat and you know i remember back when i

Was investing irobot there was always worries about like this company could come in and this company come in i remember back when i was with him dyson was talking a lot about getting in the robotic vacuum cleaner business they came out with one and from my understanding it is a complete flop and i don’t even know if they’re still selling it maybe they are but i

From what i heard it was a complete flop that they when they actually introduced that i was already out of stock at that point but it hasn’t worked out shark maybe maybe they could be a main competitor here we’re just gonna have to see now something i did see concerning here okay so i go into amazon.com i type in a simple term robot vacuum cleaner okay probably

A pretty common term lyn ago i mean i imagine you know if i was searching on amazon for one of these and what i find on amazon is i find a massive amount of very highly rated robotic type vacuum cleaners on the lower end that honestly have really good ratings okay so in and i don’t see any ai robots anywhere here guys so i type in i see a bunch of brands that have

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Four and a half stars and these brands i’ve never heard him in my life i can almost guarantee you there’s some chinese knockoff type things right and they go down the list is a bunch more i still haven’t seen any ai robots i type i go down further then finally like the shark starts showing up and whatnot i go down any even more and finally you like 10 12 15 posts

Down i start to see some high robots there which took forever to get there so there’s a lot of competition on the low end in the robotic vacuum game right now and there’s a few ways you can look at it right the first way is it’s nice that the market has finally over the past few years come to irobot ok our robots been in the vacuum robotic vacuum cleaner business

For a long time it hasn’t really gone mainstream until the last couple of years ok hasn’t gotten mainstream till it really over the past couple years so you can look at it from perspective of robots in the perfect position of the premiere player there everybody wants a robotic vacuum clean now the whole stand-up things are starting to go away more and more that’s

A good thing but at the same time you can say it’s a bad thing because you know these companies are getting a ton of money in they’re getting a ton of sales and if some of these you know chinese knockoff companies use that money rather than spending on themselves and lavish vacations about that and use that a more r&d maybe those type of companies can build

A strong brand and then actually start competing with irobot on the higher end ok so that is something to worry about you know all those ones that are selling those $200 ones if they’re making let’s say 50 bucks profit on each one and they’re following that money back into the business in research and development and whatnot that could be a problem for irobot

Over the long term the question is you know do the owners of those businesses those chinese corporations are they gonna be spending that on themselves buying these houses and cars and all that fun stuff are they gonna actually funnel that money back into the business that’s something you know that remains to be seen there now the balance sheet wise unbelievable

Balance sheet at irobot one hundred and twenty eight million dollars in cash and cash equivalents another thirty seven million in short-term investments in virtually no debt on this company a phenomenal phenomenal balance sheet now if we look at the p/e ratios here so it’s on a thirty four trailing p/e on the forward p/e basis it’s only at an eighteen guys only

At an eighteen on this company that’s pretty low that was pretty low in my opinion for a company that’s expect to still grow twenty plus percent okay they just grew fred was fifty four percent in the past quarter if they’re so expected to grow around twenty percent like like that’s a pretty low p for a company that’s growing the way it is okay so if we look here

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At what analysts are expecting from this company okay so analysts are expecting the company to have done around two dollars and 70 cents in the current year 2018 they did to two dollars and 18 cents last year and then next year into those 19 they’re expecting around $3 in 35 cents of earnings so they’re pretty you know a pretty big bump up there and earnings per

Share also current year around 15 percent sales growth revenue growth and next year 2019 expected around fifteen point five percent so another 15 percent plus year there that’s pretty strong growth numbers there guys in the eps expected and in the revenue numbers okay so my view on irobot is this is a company maybe i might be interesting getting back into i was

In in the past on off it was 2013-2014 some time back then i was in this company and it was a little bit it was a much more sleepy business back then let’s just put it that way the growth was much lower than what it is now is a much more sleepy business and whatnot so maybe at this point in time it’s worth me taking a close look back into this one and they still

Have the same things they had back then as far as the the premier position in the market which they still have okay they had a phenomenal balance sheet back when i was in the stock they still have a phenomenal balance sheet they still have collin angle there the guy’s been leading the company for you know well over a decade now founder of the company and whatnot

They still have a ton of patents a ton of technology with this company the only difference is between what i was in it and basically what’s going on now is the companies is growing much bigger than it was back then back then it was like you know 10% revenue growth somewhere around there 15% revenue growth they’ve just grew revenues fifty four percent that last

Quarter that’s pretty crazy stuff there guys so definitely a company i’m gonna have to relook into very closely and ever the stock drops into the 40s i would say there’s probably a 99% chance i’m gonna start buying if it drops under $50 per share okay probably a 99% chance we’ll start buying it but we shall see as time moves on and i’ll keep you guys updated if i

Do start to buy that obviously if you’re in my stock market membership group as soon as i buy a stock or sell a stock i post that same exact day in there so get in there if you’re not already in there there’s a million different reasons why you want to be in there thank you for watching guys and have a great day

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irobot stock down 40%. BUY NOW? By Financial Education

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