iRobot Corporation (NASDAQ:IRBT) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.
After the upgrade, the six analysts covering iRobot are now predicting revenues of US$1.5b in 2021. If met, this would reflect a meaningful 12% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to plummet 78% to US$1.22 in the same period. Previously, the analysts had been modelling revenues of US$1.3b and earnings per share (EPS) of US$0.94 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 9.8% to US$92.20 per share. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic iRobot analyst has a price target of US$100.00 per share, while the most pessimistic values it at US$78.00. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that iRobot's revenue growth is expected to slow, with forecast 12% increase next year well below the historical 17% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.5% next year. So it's pretty clear that, while iRobot's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for next year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, iRobot could be worth investigating further.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for iRobot going out to 2022, and you can see them free on our platform here..
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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