Where iRobot Corporation (NASDAQ:IRBT) Stands In Terms Of Earnings Growth Against Its Industry
Investors with a long-term horizong may find it valuable to assess iRobot Corporation’s (NASDAQ:IRBT) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how iRobot is currently performing. View our latest analysis for iRobot
How IRBT fared against its long-term earnings performance and its industry
I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend enables me to assess various companies on a more comparable basis, using the most relevant data points. For iRobot, its latest earnings (trailing twelve month) is US$50.96M, which, against the previous year’s figure, has increased by 21.34%. Since these figures may be fairly short-term thinking, I’ve created an annualized five-year value for IRBT’s net income, which stands at US$36.57M This means on average, iRobot has been able to steadily grow its earnings over the past few years as well.
How has it been able to do this? Let’s take a look at if it is solely because of industry tailwinds, or if iRobot has experienced some company-specific growth. Over the past few years, iRobot increased its bottom line faster than revenue by successfully controlling its costs. This has caused a margin expansion and profitability over time. Eyeballing growth from a sector-level, the US consumer durables industry has been growing, albeit, at a muted single-digit rate of 6.86% over the previous twelve months, and a substantial 15.51% over the past five. This shows that any tailwind the industry is benefiting from, iRobot is able to amplify this to its advantage.
What does this mean?
iRobot’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research iRobot to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for IRBT’s future growth? Take a look at our free research report of analyst consensus for IRBT’s outlook.
Financial Health: Is IRBT’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
