Unveiling iRobot (IRBT)'s Value: Is It Really Priced Right? A Comprehensive Guide

A deep dive into the valuation, financial strength, and growth prospects of iRobot Corp

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iRobot Corp (IRBT, Financial) has seen a daily gain of 5.95%, despite a 3-month loss of 26.02%. The stock, which has a Loss Per Share of 13.66, is currently trading at $37.6. But is iRobot (IRBT) modestly undervalued? This article delves into the intrinsic value of iRobot, offering an in-depth analysis of its financial performance and prospects. Read on to uncover the true worth of iRobot (IRBT).

Company Overview

Based in the United States, iRobot Corp is a leading consumer robot company. It designs and builds robots that assist consumers with tasks both inside and outside the home. With a strong portfolio of solutions that includes cleaning, mapping and navigation, human-robot interaction, and physical solutions, iRobot operates in the consumer robot business segment. Products are sold through retail businesses and online stores across the United States and globally. The company's revenue is primarily derived from product sales.


Understanding the GF Value

The GF Value is a proprietary measure that provides an estimate of a stock's intrinsic value. It's calculated based on historical trading multiples, a GuruFocus adjustment factor, and future business performance estimates. The GF Value Line represents the fair trading value of the stock. If the stock price is significantly above the GF Value Line, it is overvalued and its future return is likely to be poor. Conversely, if it is significantly below the GF Value Line, its future return will likely be higher.

Currently, iRobot (IRBT, Financial) is believed to be modestly undervalued, with a market cap of $1.10 billion and a GF Value of $43.35. This suggests that the long-term return of iRobot's stock is likely to be higher than its business growth.


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Financial Strength

Before investing in a company, it's crucial to assess its financial strength. Companies with poor financial strength pose a higher risk of permanent loss. A great way to understand a company's financial strength is by looking at the cash-to-debt ratio and interest coverage. iRobot has a cash-to-debt ratio of 1.62, better than 61.52% of companies in the Furnishings, Fixtures & Appliances industry. This indicates that iRobot's financial strength is fair.


Profitability and Growth

Investing in profitable companies carries less risk. iRobot has been profitable 9 years over the past 10 years. However, its operating margin of -29.58% is worse than 94.69% of companies in the same industry. Despite this, iRobot's profitability is considered fair.

Growth is a vital factor in a company's valuation. iRobot's 3-year average annual revenue growth is 1%, which ranks worse than 63.5% of companies in its industry. The 3-year average EBITDA growth rate is 0%, ranking worse than 0% of companies in the industry. This indicates that iRobot's growth has been relatively slow.


Evaluating a company's profitability can also be done by comparing its return on invested capital (ROIC) to its weighted average cost of capital (WACC). If the ROIC is higher than the WACC, the company is creating value for shareholders. Over the past 12 months, iRobot's ROIC was -67.24, while its WACC came in at 7.49.



In conclusion, iRobot (IRBT, Financial) is believed to be modestly undervalued. The company's financial condition is fair, and its profitability is fair. However, its growth ranks worse than 0% of companies in the Furnishings, Fixtures & Appliances industry. To learn more about iRobot stock, check out its 30-Year Financials here.

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