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iRobot Corporation Message Board

  • sat_march_4 sat_march_4 Jul 24, 2013 7:07 PM Flag

    Cut by 15% for delivering results

    - generated ~$8 MM in positive operating cash flow in 2Q13
    - gross margins improved from ~44% in 1Q13 to ~47% in 2Q13
    - continued traction for robotic vacuuming products in US, Europe and Asia
    - guidance intact (raised lower end of guidance range)
    - marketing and branding in place to support holiday season sales and upside surprise
    - military sales have not gone away and continue to build
    - diversification into telepresence and healthcare robot services happening now and will be in place to support 2014, 2015 growth
    - cash ~$150 MM, consistent profitability with steady topline growth
    - patent portfolio continues to expand i.e. moat is not shrinking

    stock gets cut by 15%..seems a little extreme and company was going out of business

    but reaction to news, trumps the why is stock lower by 15%

    - existing holders/ sellers are short term oriented and done with robot theme
    - market was expecting miracles from RP VITA in this quarter, when these expectations were not set and thus not met
    - management is doing a subpar job in selling / telling the story

    what needs to happen
    - holder list needs to start showing some smart money vs the dumb money holders right now
    - managment needs to step up game in regards to PR and IR - they have a great story and they should be out telling are based in boston why isnt Fidelity a holder?
    - set expectations the right way and meet them
    - discuss the exciting applications company may be working on and the associated addressable markets
    - deliver have a liquid M&A if needed.acquire technology if needed..acquire revenues if the number 1 consumer robotics play in the planet..earn your multiple

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    • There were red flags.
      A ton of insider selling last quarter.
      Multiple announcements of a military contract that yielded 3M in revenue for the quarter. Didn't they have anything better to say?

      The Company fairly painted expectations. They were at numerous conferences and on TV showing their products and touting their coming projects.

      I believe the market got ahead of itself here. The hospital project has a lot of sizzle, but if they put robots in 300 hospitals, it may amount to 2% of annual company sales. The Cisco partnership may have slightly more potential, but it's not yet clear what the revenue split might be.

      The Company seems to have gotten better at marketing their products. They also may have some additional benefit from integrating the ER products into their system. They're extremely imaginative and their patents MAY have significant value. Is this worth a 36X multiple?

    • the sucker retailers sold at huge losses today. If this was truly bad news all the institutions would have sold everything off like they did a year ago and put this to 27.

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