Shares of iRobot (NASDAQ:IRBT) took a beating after the company released its second-quarter 2014 results in July. The robot maker fell short of revenue estimates and missed earnings estimates by a hair if we exclude the benefit of a one-time tax valuation allowance. The stock is down 16% since earnings, as of this writing.

Earnings releases, however, never tell the entire story, so you might want to check out five key takeaways from the conference call.

In this piece, we're going to look at three reasons iRobot's stock price could rise. To be clear, this is not a declaration that it will rise. We're simply examining one bull thesis, just as another article examined a bear argument.

Irobot Roomba

The Roomba vacuuming robot. Source: iRobot.

1. Dyson's entrance into the market could expand the market size and possibly benefit iRobot

British engineering company Dyson unveiled its first commercially available robot vacuum cleaner at an event in Tokyo last week. The 360 Eye will launch in Japan in early 2015, and then elsewhere later in the year.

Dyson is known for its engineering expertise and its higher-end bagless vacuum cleaners, so the 360 Eye is likely to be a formidable competitor to iRobot's best-selling Roomba. That, of course, could be bad news for iRobot, which I explored in my recent article about Dyson's 360 Eye.

However, there's also a potential positive for iRobot. It seems very likely that Dyson's entrance will increase consumer awareness of the robot vacuum category and expand the entire market. Depending upon how well the 360 Eye functions and its pricing relative to the Roomba, sales of the Roomba could actually increase.

Dyson

Dyson 360 Eye. Source: Dyson.

It doesn't appear as if Dyson has released an official price, and most outlets are reporting that no price is yet available. However, CNET has reported that the 360 Eye will be priced at 130,000 yen -- or about $1,237 -- when it starts selling in Japan early next year. If accurate, that price tag makes the product considerably more expensive than iRobot's Roomba. The highest-end Roomba, the 880 model, sells for about $700. Dyson's entrance could expand the market enough to more than compensate for the competitive threat that the 360 Eye presents to the Roomba if there's a considerable price differential between the products.

2. Cleaning-robot mania could ignite in the Asian market

For background, iRobot's home robot business grew 20% last year, driving its overall total growth of 12%. This is the company's bread-and-butter business, accounting for 88% of total revenue last year, and it's projected to account for about 91% this year. Breakdown of sales by region was roughly 40% U.S., and 30% each for Asia-Pacific and Europe, Middle East, and Africa.

Growth in the Asia-Pacific region was an especially robust 40% last year, driven by what the company characterizes as "strong demand" in Japan and China. iRobot's management has stated that strong growth was expected to continue in Japan and China.

It's possible that the APAC region could experience stronger-than-expected growth going forward, which probably would power the company to post stronger-than-expected results. And, of course, that would almost surely drive the stock price higher.

The Japanese's culture is especially comfortable with robots, and the fast-emerging middle class in China hungers for products from the West. Notably, iRobot's been expanding its distribution in China this year, and we should see how this pans out when full-year 2014 results are announced early next year.

This scenario, of course, has some overlap with the Dyson scenario I discussed earlier.

3. Telepresense robots could outperform expectations

iRobot first entered the telepresence robot market last year, when it partnered with inTouch Health to sell the RP-VITA to hospitals. Earlier this year, iRobot started shipping its Ava 500 Video Collaboration robots, which it markets to Fortune 1000 companies. Cisco is its partner on this initiative.

The telepresence robots accounted for just 1% of iRobot's total revenue in the first half of 2014 and are projected to account for just 1% of its full-year revenue. If this business grows faster than expected, iRobot's stock price could pop, as that could be an early indication that the business will ultimately be successful.

Irobot Rp Vita

RP-VITA. Source: iRobot.

If this segment does experience faster-than-projected growth, it will probably come from the telemedicine bots, in my opinion. These products were first adopted for stroke diagnosis applications. CEO Colin Angle stated on the last conference call that RP-VITA is "really shining" and the company's sales win rate is "astronomically high" for stroke diagnosis applications. While that's good news, the better news is that the company believes that intensive care unit applications present an even bigger opportunity. That's because medical specialists need to monitor patients very frequently.

Foolish final thoughts 

Any of these three scenarios could cause iRobot's stock price to rise. However, it doesn't seem likely that the telepresence robots will experience faster-than-expected growth in the near term. It does seem likely that Dyson's entrance into the robot vacuum cleaner market will help expand the market's size. However, it's too soon to gauge the affects on Roomba sales. 

 

Beth McKenna has no position in any stocks mentioned. The Motley Fool recommends Apple, Cisco Systems, and iRobot and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.