<!-- HTML_TAG_START -->NasdaqGS:IRBT Earnings and Revenue Growth January 12th 2025<!-- HTML_TAG_END -->
While it may not be enough for some shareholders, we think it is good to see the iRobot Corporation (NASDAQ:IRBT) share price up 24% in a single quarter. But the last three years have seen a terrible decline. Indeed, the share price is down a whopping 84% in the last three years. So it’s about time shareholders saw some gains. The thing to think about is whether the business has really turned around. We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don’t have to lose the lesson.
With that in mind, it’s worth seeing if the company’s underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
Check out our latest analysis for iRobot
iRobot isn’t currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn’t make profits, we’d generally hope to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last three years iRobot saw its revenue shrink by 27% per year. That’s definitely a weaker result than most pre-profit companies report. And as you might expect the share price has been weak too, dropping at a rate of 23% per year. Never forget that loss making companies with falling revenue can and do cause losses for everyday investors. It’s worth remembering that investors call buying a steeply falling share price ‘catching a falling knife’ because it is a dangerous pass time.
The company’s revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
If you are thinking of buying or selling iRobot stock, you should check out this FREE detailed report on its balance sheet.
iRobot shareholders are down 65% for the year, but the market itself is up 23%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year’s performance may indicate unresolved challenges, given that it was worse than the annualised loss of 13% over the last half decade. We realise that Baron Rothschild has said investors should “buy when there is blood on the streets”, but we caution that investors should first be sure they are buying a high quality business. It’s always interesting to track share price performance over the longer term. But to understand iRobot better, we need to consider many other factors. For instance, we’ve identified 3 warning signs for iRobot that you should be aware of.
