It's virtually impossible to value a human being.
To a company, a human being is valued at an hourly or annual
rate. To the military, highly trained personnel are worth
millions. To a family, a human being is priceless. But in spite
of the obvious challenges, there is one little-known company that
is working hard to answer this question.
As a leader in robotic technologies, this company is helping
its commercial and military customers replace and complement
human beings with products that increaseproductivity and reduce
risk. Those incredible financial and social benefits are leading
to biggains on the chart, withshares up 85% on theyear .
IRobot (Nasdaq: IRBT)
is a little-known global leader in the consumer, industrial and
military robotics markets. That has placed the company in a great
position tocash in on explosive demand for robotic and automated
IRobot's largest division is Home Robot, where the company is
a global leader in the consumer and industrial roboticsmarket ,
launching the revolutionary Roomba automated vacuum cleaner in
2002. Its product portfolio now includes automated mopping,
cleaning and washing machines.
These products continue togain popularity with both retail and
industrial clients because theyoffer big time andmoney savings .
Automating simple, repetitive processes is a simple matter of
return on interest that also drives productivity.
Home Robot is a very important business segment for
iRobot,accounting for 90% of the company'srevenue , projected to
be between $430 million and $450 million in 2013. And the
business continues to perform well. Recent second-quarter results
saw total Home Robotsales increase 20% from last year, to $115
million. Domestic sales were even better, up 26%. International
markets also continue to be an important part of iRobot's growth
strategy, where sales were up 18% as the company continues its
expansion into China.
But even though the Home Robot division looks great on its own
with market-leading technology and a portfolio of more than 200
domesticpatents , iRobot is making a strategic move into an even
higher-growth market with even more long-term potential.
IRobot's Defense and Security division is on pace
to produce revenue of $50 million this year. The
division'sbacklog has grown to $20 million.
IRobot's Defense and Security division is making moves
tocapitalize on the military's growing interest in robotic
devices. The company is a leader in remote control robots
designed for high-risk, police and military situations where
human life is at risk. Take a look at the picture to the right.
These are familiar devices that most peoplewill
These machines are in huge demand from law and military
enforcement agencies because they help save lives. When you think
about it from that perspective, this robot technology becomes
In early July the division announced it had landed its biggest
deal ever, a $30 million contract with the U.S. Army's Robotic
Systems Joint Program Office. In May, the division announced a
$7.2 million contract with Brazilian military and law enforcement
agencies. As you can see, the segment has been on a roll, having
sold more than 5,000 robots to military and civil customers
across the world.
That has iRobot's Defense and Security division is on pace to
produce revenue of $50 million this year. The division's backlog
has grown to $20 million.
IRobot is also heavily involved in leveraging its robotic
technology for corporate applications. It recently unveiled an
advanced videoconferencing robot developed with
Cisco Systems (Nasdaq: CSCO)
called Ava 500 that allows remote attendees to experience virtual
This marks the second release in iRobot's Remote Presence
business and unlocks an entire new market for mobile conferencing
tools that does not currently exist.
IRobot is definitely not hurting for intellectualcapital . The
company has taken the core concepts of robotics and found
consumer, industrial, corporate and military applications. And
considering my colleague Andy Obermueller, editor of
advisory, is predicting 2014 will officially mark the beginning
of the "age of the drone," I think the kind of robotics
technology iRobot is involved in will become a mainstay, becoming
even more widely adopted by the military, state and local
governments, corporations -- even inside the household..
Looking forward, iRobot is expected to increasing itsearnings
64% this year and another 12% in 2014 as the company continues to
benefit from surging military demand.
Risks to Consider:
As a smaller player in the very large and competitive defense
contractor space, iRobot will be facing fierce competition from
some of the largest players in the industry. Although iRobot has
carved out a very nice niche for itself in the high-growth
robotics space, defense spending continues to fall, causing
Action to Take -->
In spite of the impressive growth story and gains on the chart,
iRobot's forward price-to-earnings (P/E ) ratio of 38 is a
discount to its highly volatile 10-year average of 73 and well
below its all-time high of 957. That places investors in position
for more gains as the company continues to cash in on its leading
presence in the global robotics market.
© Copyright 2001-2010 StreetAuthority, LLC. All Rights Reserved.