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iRobot Shares Rise as Google Makes Fresh Robotics Deal

iRobot Shares Rise as Google Makes Fresh Robotics Deal

Robots may someday rule the universe, rendering humans a subjugated underclass beholden to their automated masters. But, for now at least, they’re just ruling some headlines. News broke over the weekend that Google (GOOG) has acquired Boston Dynamics, an engineering firm with military ties that’s widely known for its manufacture of extremely speedy, disconcertingly animal-like robots including the BigDog, WildCat and Cheetah. The sum of the acquisition has not been disclosed; this is the eighth robotics company search-giant Google has acquired in the past year, and the first one with a military connection. 

Following the headlines (Google confirmed the acquisition on Friday), Google shares are up around 1% amid a broad Wall Street rally. But a far smaller robotics company that also has military ties may be getting a boost from the news: iRobot (IRBT) has landed on our Yahoo Finance “trending tickers” list Monday, up around 4%, to $30.54, on higher than average volume. iRobot, a pure-play robotics company based in Bedford, Mass., and founded in 1990 by MIT roboticists, is best-known for its Roomba, the circular vacuum that glides autonomously across household floors, sucking up dirt on its journey. Robot vacuums make up around 15% of the $7 billion global vacuum industry, and the Roomba, which debuted in 2002, has sold more than 10 million units globally in its various iterations. In 2010 the device was inducted into the robot hall of fame. The newest version of the vacuum, the iRobot Roomba 880, will set you back around $700; older versions can be purchased for less than $300.

The Roomba has even infiltrated the pop-culture realm, playing a role in the popular NBC sitcom "Parks and Recreation." The DJ Roomba, with a tunes-blasting MP3 player strapped to it, has been amusing the show's audience for the past few seasons. Other home-based products from iRobot include devices that will mop the floor, clean the pool and dig out your gutters. Last year the company ventured into the healthcare sector, teaming with InTouch Health to unveil a robot that allows doctors to examine diagnostic data in real time and interact remotely with patients. 

And, as CEO Colin Angle discussed recently on Bloomberg TV, iRobot also has a place on the battlefield. The company manufactures combat-specific unmanned ground vehicles (UGVs), including bomb diffusers that can be controlled remotely from miles away, and has delivered more than 5,000 of these to defense forces across the globe. Its 710 Warrior, developed with the U.S. Army Research, Development and Engineering Command's tank and automotive center (TARDEC), is a 300-pound robot that can carry, with one arm, up to 350 pounds.

The stock received an upgrade to “neutral” from “underweight” at JPMorgan last week, and it received a “buy” rating in a report from research firm Sidoti on Monday, according to Fly on the Wall. The company, with a market cap of more than $900 million, made $436 in revenues in 2012; the stock trades at a P/E multiple of 48.13, which is relatively hefty but still below its average of the past five years (just under 61, according to FactSet). Shares are up more than 65% year-to-date.