iRobot (NasdaqGS:IRBT) Q3 2020 Earnings Prep

in EARNINGS/INVESTING IDEAS by

iRobot Corporation (NasdaqGS:IRBT) is scheduled to report Q3 earnings results after markets close for trading on October 20, 2020.

The company is expected to report earnings of $0.97/share on revenue of $312.4 million. The consensus earnings per share (EPS) of $0.97/share is based on a poll of 7 analysts and represents a decline in eps of −35.2% over the same quarter last year, when the company reported earnings of $1.50/share.

The revenue forecast of $312.4 million based on a poll of 6 analysts implies a year-over-year (YoY) growth in revenue of 8.0%. Last year the company reported $289.4 million in revenue for the quarter.

Expected to report EPS contraction of −35.2% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $312.44 $289.40 8.0%
EPS $0.97 $1.50 −35.2%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.

What are your expectations from iRobot Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.29 $1.06 268.4% Beat
Q1, 2020 -$0.46 -$0.32 −29.8% Missed
Q4, 2019 $0.69 $0.69 0.1% Beat
Q3, 2019 $0.82 $1.50 82.9% Beat
Q2, 2019 $0.23 $0.48 104.7% Beat
Q1, 2019 $0.70 $0.96 37.1% Beat
Q4, 2018 $0.58 $0.89 52.2% Beat
Q3, 2018 $0.52 $1.13 118.4% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 27, 2020, the stock price reacted by falling −7.8%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 21, 2020 $86.07 $79.35 −7.8% Decline
April 28, 2020 $57.10 $60.29 5.6% Increase
February 5, 2020 $48.12 $57.82 20.2% Increase
October 22, 2019 $55.74 $49.06 −12.0% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.30, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.30 implies a 1.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

iRobot Corporation is currently trading at $93.57/share, up 4.8% for the day. The company is trading at approximately 99.0% of its 52-week high of $92.31/share. The company’s stock price is up 17.9% since the last earnings report and up 5.5% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 69.76 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:IRBT Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 27.16 and a forward P/E multiple of 40.06.

iRobot Corporation’s current share price also implies a price-to-book (P/B) multiple of 3.83. The following table summarizes some other key fundamental ratios:

Data as of October 19, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 27, 2020
Stock Price (Current) $93.57
P/E Ratio 27.2x
P/E Ratio (Fwd) 40.1x
PEG Ratio 2.3
Total Debt / Total Capital 2.3%
Levered Free Cash Flow $97.306 million
EV / EBITDA 16.4x

Finbox

iRobot Corporation is a mid-cap stock with a market capitalization of $2.49 billion and a total enterprise value of $2.307 billion. The company operates in the Consumer Discretionary sector and the Household Durables industry.

iRobot Corporation designs, builds, and sells robots to the consumer market in the United States, Europe, the Middle East, Africa, and internationally. It offers Roomba floor vacuuming robots; Braava family of automatic floor mopping robots; Terra robotic lawn mower products; and Root robots designed to help children learn how to code. The company sells its products through distributor and retail sales channels, as well as through online stores and resellers. iRobot Corporation was founded in 1990 and is headquartered in Bedford, Massachusetts.

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