IRBT represents one of the most under appreciated technology plays at under $1 BB market cap.
The complexity of bringing hardware and software to perform intelligent, value added tasks and applied to multiple industries and applications will not be easy to replicate, if at all possible. IRBT is far ahead of the competition as far as IP, patents and know how is concerned and has created an undisputably solid moat around its business.
The company is in an enviable position to bring big ticket advanced technology robotics to affluent early adopters (consumer, enterprise, government, military) and continuosly bring costs down to cater to the mass market. This is exactly what Tesla's strategy has been and the market is now rewarding the company for it.
The company is just starting to create a presence in emerging markets such as China, which should provide a long runway of growth for legacy and new products.
How much of the company's valuation today should comprise of what is reflected in 12 month fwd. revenue and earnings expectations vs. what the company's product protfolio will look like 5 years from now? Will there be more robotic applications in the market in 5 years vs. today? Most likely, Yes. Will IRBT continue to be a player in this opportunity? Most likely, Yes.
Why is this a 'Multi Dimension' play?
1) The company generates real revenues, earnings and cash flow - its not a startup, its not in the early stages of commercialization, its a solid small cap growth story.
2) The company's products are increasingly being geared towards the enterprise and end consumer but the company still maintains a millitary and government presence.
3) Buy Out candidate - Hypothetically, a company like GOOG could pay $2BB tomorrow (2x current market cap) for IRBT and digest the acquisition with less than two months worth of its cash flow. Does a $2BB valuation sound aggregious when Zillow (Z) is currently valued at $2BB or Instagram was bought for $1BB or FB at $65 BB?
I think investors are starting to see Colin Angle as the real deal. For so long, iRobot traded below its IPO price (wasn't it $24?) and was subject to the whims of the government writing out checks and this tarnished the sterling qualities of the CEO.
But now iRobot has moved into areas where it controls its own fate and Colin Angle is being recognized for the visionary that he is. The guy has a gift for communicating complex ideas in simple turns. And the cherry on top, he shows a great deal of business savvy which is always a potential concern when the CEO is also a genius MIT techhead.
It looks like there will be a long queue of companies wishing to partner with Colin and iRobot:
1) Currently we have InTouch on the RP-Vita.
2) Raytheon is our partner with the 3D printing manipulator which recently received a patent. From Investor Hub: "The iRobot and Raytheon patent is in place. The success of 3D printing is obnoxiously apparent as DDD is growing by leaps and bounds and just had a 3-2 stock split. Robotic 3D manufacturing by Raytheon and partner IRBT is going to change the world. Looking at the stock price in the 20's is going to be fun after the Robot Fabricator is released and sales start ramping. IRBT was smart to partner with Raytheon. "
3) Honeywell could be the go-to partner for a robotic security business.
agree. i've been watching since high teens and finally bit today. would have been nice to get skin in the game earlier but frankly i think the prospects here are bright enough on a 5-year time horizon that i'm not really sweating it. as you mentioned they have a good jump on the field with regards to tech and bringing product to market. there will be competition but the market can accommodate that--as tech gets smaller, cheaper, and smarter, we are going to start seeing a lot more of it.
zero debt is also nice, and if the next few quarters shape up well, this stock really isn't all that expensive from a forward earnings perspective.