We recently published a list of 10 Best Home Appliance Stocks to Buy According to Analysts. In this article, we are going to take a look at where iRobot Corporation (NASDAQ:IRBT) stands against other best home appliance stocks to buy according to analysts.
Overview of the US Home Appliance Industry
The home appliance industry is likely to continue flourishing as long as people continue buying homes and relying on technology to make their daily tasks easier. According to Grand View Research, the household appliances market in the US was valued at $58.33 billion in 2023. It is anticipated to grow at a compound annual growth rate (CAGR) of 7.1% between 2024 and 2030. One of the primary driving forces behind this growth is the rise in the disposable income levels of consumers. In addition, the rapid pace of urbanization is also a pivotal factor behind the market’s expansion.
According to a report by Mordor Intelligence, the United States’ major home appliances market is expected to have a market size of $34.42 billion in 2025. It is anticipated to grow at a compound annual growth rate of 2.93% between 2025 and 2030, reaching $39.77 billion at the end of the forecast period. The growing economic pressure and changing consumer lifestyles are the primary reasons behind the growth in the major home appliances market in the US.
In addition, the rising penetration of distribution channels such as brand outlets, supermarkets, specialty stores, and e-commerce is contributing to this growth. The demand for primary household appliances such as washing machines, dishwashers, and mixer grinders is significantly increasing due to consumers’ busy and sedentary lifestyles. Another report by Mordor Intelligence shows that the overall US home appliance market size will grow at a compound annual growth rate of 3% between 2025 and 2030, reflecting similar trends.
Trends in the US Home Appliance Market
A prominent trend emerging in the home appliance industry is people opting to purchase home appliances directly from manufacturers instead of using traditional middlemen. According to PWC’s June 2023 Global Consumer Insights Pulse Survey, a majority of customers, around 63%, reported buying products directly from a brand’s website. This number is expected to rise in the coming years, as around 29% of the consumers stated that while they hadn’t yet adopted this trend, they were thinking about going direct-to-consumer.
The US Appliance Satisfaction study conducted by J.D. Power in 2023 showed that around 75% of appliance purchases occurred on the first store visit. In addition, nearly 71%, or three-fourths of home appliance transactions, took place in-store. Although 29% of the purchases occurred online, a majority of consumers still preferred seeing the equipment in person before buying it.
In 2023, Christina Cooley, home intelligence lead at J.D. Power, stated:
“This year’s data shows us that 56% of home appliance shoppers are doing their research online before heading in-store to purchase. Though price is almost always going to be the main driver of whether someone decides to purchase an appliance or not, one-third of buyers did not purchase because they were seeking specific options and features, and one-fifth indicated they couldn’t purchase, as their desired appliance wasn’t in stock.”
Will the Growth of the Housing Market Affect the Home Appliance Industry?
According to Mordor Intelligence, the US housing sector is likely to generate growing demand for home appliances. It is, thus, a prominent driving force behind the industry’s future growth prospects. Development of the housing sector and improvement in people’s living conditions have a direct positive effect on the growth of the home appliance market. Therefore, a growing housing sector in the US is expected to trigger growth in the country’s home appliance market.
Our Methodology
We sifted through stock screeners, online rankings, and ETFs to compile a list of 30 home appliance stocks. We then selected the top 10 stocks with the highest analyst upside potential as of January 2, 2025. The list is sorted in ascending order of analyst upside.
Why do we care about what hedge funds do? 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)
Analyst Upside: 41.94%
iRobot Corporation (NASDAQ:IRBT) is a global consumer robot company with a portfolio of smart home devices and home robots. Its portfolio features advanced technologies for cleaning, human-robot interaction, mapping and navigation, and physical solutions. Its offerings include the Braava family of automatic floor-mopping robots, the Clean Base Automatic Dirt Disposal, and others.
The company has been facing persistent market segments and competitive headwinds that affected its sell-through performance in fiscal Q3 2024. However, it expects to see a stabilization in its revenue trend over time. It is on track to exceed its operating expense targets, and is investing in areas that drive revenue and improve its foundation for profitable growth. iRobot Corporation (NASDAQ:IRBT) is also expanding its new product pipeline and announced the creation of iRobot Labs in July. iRobot Labs will serve as the company’s innovation center and represent its global initiative to boost its domestic product and software engineering talent.
In addition, the company has reduced its supply chain and R&D expenses by relocating certain non-core engineering and supply-chain functions. It announced an additional workforce reduction as part of its ongoing restructuring plans and is transitioning to a new product development paradigm with its contract manufacturers to facilitate growth. This new operating model is allowing the company to significantly increase its new product innovations with less than half the internal resources and around one-third the cost. Such transformations are expected to improve the company’s long-term performance and generate shareholder value. iRobot Corporation (NASDAQ:IRBT) ranks fifth on our list.
Overall, IRBT ranks 5th on our list of best home appliance stocks to buy according to analysts. While we acknowledge the potential of home appliance stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. 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.