It was not so long ago that household robot maker iRobot (IRBT), the people who brought us the Roomba, was on top of the world. A potential buyout target from Amazon (AMZN), the leader in autonomous cleaning robots, and more made iRobot a household name. But times have changed, and now, iRobot is warning that it may not be a “going concern” much longer. Shares cratered, down nearly 34% in Wednesday afternoon’s trading.
In order to address this very serious problem that could ultimately take iRobot out of the market, it has begun a “strategic review” of its operations. After posting fourth quarter earnings that featured not only revenue that was lower than expected, but also a bigger overall loss than expected, it became clear that iRobot was going to have a tough time just paying its bills.
It was expecting to grow its sales as it rolled out new products, but even iRobot seems to doubt just how far that will go. A recent filing noted: “Given these uncertainties and the implication they may have on the company’s financials, there is substantial doubt about the Company’s ability to continue as a going concern for a period of at least 12 months.”
How About More New Products?
Even as iRobot faces concern about whether or not it can remain a concern, it is still trying, to the last, to win the market over with new products. In fact, it just rolled out fully eight new models, including one that offers—for an automated housecleaning robot, anyway—a major new feature: a dust compactor.
Reports note that the new Roombas will all offer better suction, improved navigation, and even bagless options for storing all the dust they pick up off the floor. But these new models will not come without some drawbacks: the Combo Essential model is out the door, replaced with the Roomba 105 and 205. The I and J series Roombas, meanwhile, will be thrown over for the Roomba Plus 405 and 505. Roombas will run between $299 and $899, reports note.
Is iRobot a Good Stock to Buy?
Turning to Wall Street, analysts have a Hold consensus rating on IRBT stock based on one Buy assigned in the past three months from Needham analyst James Ricchiuti, as indicated by the graphic below. Despite a 57% loss in its share price over the past year, Ricchiuti has no price target on the stock.
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