Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of iRobot (NASDAQ: IRBT ) were shorting out today, dropping as much 11% after its fourth-quarter-earnings report missed the mark.
So what: The maker of household and security-related robots said earnings per share fell from $0.54 a year ago, to $0.26, as all-around operating expenses increased significantly, though that was slightly ahead of estimates at $0.24. Revenues, however, fell 1.5%, to $124.5 million, missing estimates at $127.3 million. Though sales growth was essentially flat, CEO Colin Angle noted strong growth in the home robot business, which increased 16% over a year ago due to heavy adoption in Japan. Sales in the defense and security segment declined, in part, due to the government shutdown.
Now what: iRobot lowered the top end of its full-year revenue guidance to $490 million, from $495 million, and now expects sales of $485 million-$490 million. It also adjusted its EPS guidance from $0.88-$1.00, to $0.90-$0.95, and both projections were below analyst estimates of $492 million in revenue and $0.98 EPS. For a stock with a P/E of 38, growth seems to be coming awfully slowly. While its technology gives it a unique position in the market, the stock may a bit overvalued at this point, especially since shares had doubled from the end of the last year.
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