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Roomba Sweeps Forward on Wall Street

· Roomba,iRobot,Robot,Vacuum,Consumer Spending

Roomba Sweeps Forward on Wall Street

iRobot’s $300 Roomba, revolutionizing house cleaning and beer pong, is also generating nearly $1 billion in revenue annually. As its flagship product, it has largely contributed to iRobot’s 13 million units of robot vacuum cleaning (RVC) sales. More recently, iRobot has introduced the BraavaMop and Mirra pool cleaner.[1] The BraavaMop, starting at $119.99, is a robot that mops and sweeps for you. The Mirra pool cleaner, starting at $999.99, cleans pool surfaces and water.[2] Its management, however, believes that RVCs like Roomba have only reached 10% of their potential market in North America. So how high can these robots go?[3]

Since Roomba’s inception in 2002, the company has reached a market capitalization of nearly $2.2 billion. The Motley Fool reports that the firm has grown tremendously, initially selling $15 million in products to selling over $770 million within the past year. At first, the outlook looks bright and clear. Yet, over the past few years competitors have caught up and offered similar products to the public. Companies such as Sharkninja, Dyson, Bisell, and Techtronic Industries Company have created their own robot vacuums cleaners that have been rated even higher than iRobot’s Roomba by renowned magazine Consumer Reports, which ranked its favorite robot cleaners. Although three Roomba models made the top-ten list, none ranked in the top 3 and were beat by a more expensive RVC by Samsung and a cheaper RVC by Chinese-owned Ecovacs.[4]

A lack of early competition and a steady increase in competitors over the past few years helps explain iRobot’s turbulence in the stock market. Robot’s stock rose from its low of about $30 in February of 2017 to its high of $109 in June of 2017 just to sink back to $73 in June of 2018. While iRobot is generating hundreds of millions of dollars annually, investors have clearly started to question its rise as competitors bite away at its market share.

 

Written by Albert Daniel Shub, Edited by Jack Vasquez & Alexander Fleiss

 

[1] https://www.fool.com/investing/2018/06/20/how-braava-will-be-irobots-next-big-catalyst.aspx

[2] https://www.irobot.com/For-the-Home/Mopping/Braava300.aspx

[3] https://www.fool.com/investing/2018/06/11/could-irobot-corporation-be-a-millionaire-maker-st.aspx

[4] https://www.fool.com/investing/2018/01/02/could-irobot-corporation-be-a-millionaire-maker-st.aspx

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