We recently compiled a list of the 8 Best Robotics Stocks Under $10. In this article, we are going to take a look at where iRobot Corporation (NASDAQ:IRBT) stands against the other robotic stocks under $10.
The concept of lifelike machines performing human tasks is fascinating to some and unsettling to others. However, robotics is not about replacing humans; it’s about automating repetitive tasks to allow people more time for meaningful activities. Recent breakthroughs, such as generative artificial intelligence (AI) services like ChatGPT, have accelerated the adoption of automation in organizations. Robotics is already transforming our everyday lives, from manufacturing and logistics to MedTech and even our homes, thus revolutionizing numerous industries and streamlining production lines in manufacturing. Most people interact with robots in some capacity. For example, Sony Group Corporation offers the AIBO series, an autonomous entertainment robot for the home, while iRobot Corporation provides Roomba robot vacuums for home cleaning. Additionally, companies like Alibaba Group Holding Limited and Amazon.com, Inc. use robots to automate warehouse management and customer product delivery.
According to Market Research Future, the global robotics market reached $59.7 billion in 2022 and is on an impressive growth trajectory. The market is expected to exceed $200 billion by 2030, driven by a projected 16.1% CAGR between 2023 and 2030. This growth reflects increasing robotics integration across various sectors. Reflecting this growth, a recent press release from the International Robot Federation (IFR) highlights significant investments in automation by U.S. manufacturing companies, with industrial robot installations rising by 12% to 44,303 units in 2023. The automotive industry emerged as the leading adopter of robots in the U.S., followed by the electrical and electronics sectors. The IFR reports that sales in the automotive segment increased by 1% in 2023, with a record 14,678 robots installed, building on a 47% increase in 2022 with 14,472 units installed.
The robotics industry thrives on healthy debates, and one of the most intense recent discussions centers around humanoid robots. Although this topic has been significant for decades, the rise of startups like 1X and Figure, along with projects from established companies like EV market leader Tesla, has brought humanoids back into the spotlight. Advocates argue that since our world is designed for humans, building robots in our image makes sense. Humanoid robots offer advantages in reach, the ability to navigate stairs, and dexterity.
In this context, the robotics industry has garnered attention from notable tech figures. Earlier this year, Bill Gates highlighted several “cutting-edge robotics startups and labs” that excite him, including three companies focused on developing humanoids. Gates started off with Agility Robotics, an American startup that has developed a human-centric, multipurpose robot designed for logistics work. This robot, roughly human-sized, can handle heavy loads and express “emotions” through LEDs on its face to improve interaction with human colleagues. Another notable initiative is Tevel, an Israeli startup deploying autonomous flying robots for continuous selective fruit picking, ensuring ripe apples are harvested around the clock. Gates also mentioned Apptronik, whose robots have the potential to assist astronauts on Moon or Mars missions.
Our Methodology
For this list, we sifted through various ETFs and internet rankings covering robotics stocks to compile an initial list. We then selected the top robotics stocks that were trading under $10 based on overall hedge fund sentiment toward each stock. This assessment was made using data from Insider Monkey’s database, which tracks 919 elite hedge funds as of the end of the first quarter of 2024. The list is organized in ascending order according to the number of hedge fund holders in each firm. Why do we track stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close-up photo of a robotic vacuum cleaner, highlighting its advanced design and home innovation capabilities.
iRobot Corporation (NASDAQ:IRBT)
Share Price as of June 11: $9.67
Number of Hedge Fund Holders: 17
iRobot Corporation (NASDAQ:IRBT) focuses on smart home appliances, offering a variety of robotic solutions such as vacuum cleaners and floor mapping robots. Their product lineup also includes handheld vacuum cleaners and a programmable platform for their robots.
After a planned merger with Amazon fell through, IRBT shares experienced record short interest, causing per-share prices to drop by more than 75% since January 1. Amazon’s interest in iRobot Corporation (NASDAQ:IRBT) wasn’t driven by vacuum sales but by the company’s advanced technology and intellectual property. Despite the failed merger, iRobot retains its valuable IP portfolio, which could lead to significant gains either through its operations or a potential alternative buyout.
In addition, the first quarter saw iRobot Corporation (NASDAQ:IRBT) reporting a GAAP net income per share of $0.30, a substantial improvement from a net loss per share of $2.95 in Q1 2023. This result significantly surpassed analyst expectations of a $2.01 loss per share. The non-GAAP net loss per share came in at $1.53, an improvement from the previous year’s $1.67 and closer to analyst predictions. These results were positively impacted by a $75 million termination fee paid by Amazon, marking a strategic gain during ongoing restructuring.
According to Insider Monkey’s database, 17 hedge funds held stakes in iRobot Corporation. D. E. Shaw had the largest position with 1.19 million shares valued at approximately $10.49 million.
Overall IRBT ranks 2nd on our list of the best robotics stocks to buy under $10. You can visit 8 Best Robotics Stocks Under $10. to see the other robotics stocks that are on hedge funds’ radar. While we acknowledge the potential of IRBT as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than IRBT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
