The global robotics market was valued at $49.94 billion in 2020 and has been forecasted to grow at a huge 25.4% Compound Annual Growth Rate (CAGR) by 2025. This makes the space a hot investment opportunity for those looking to receive big returns. Here are two robotic stocks you should consider.
iRobot (NASDAQ: IRBT) has a market cap of $2.48 billion and the stock is up 132% over the past five years.
The company designs and builds consumer robots — namely automated vacuums and mops for households. iRobot had an impressive 2020 by acknowledging how consumer needs had changed which pushed it to innovate and further develop its high-end products. These moves have made it a consumer robotics market leader.
iRobot is determined to stay at the top, spending almost $41 million on research and development in the first quarter of 2021 alone. This expansion mindset is very attractive to long-term investors as it shows the company is investing in its future. iRobot has been constantly upgrading features on its existing products, with its latest Roombas being equipped with advanced three-stage cleaning, personalized cleaning routines, and self-emptying features.
In Q1, revenue jumped to $303.3 million, a 58% increase year-over-year (YoY). Pandemic-fueled growth boosted iRobot’s e-commerce sales which accounted for 56% of its revenue. As consumers spent more time in their homes during the lockdown, cleaning products to make living situations more pleasant, like what iRobot offers, became very popular.
The firm also launched its handheld vacuum to grow existing customer revenue. In addition, iRobot continued its progress with a new service, Protect/Protect+ extended warranties, which is a premium care service, and extended iRobot Select, its robot-as-a-service membership program.
Raytheon (NYSE: RTX) is a technology and innovation leader specializing in robotics, defense, aerospace, civil government, and cybersecurity solutions. The company works with robotics to find innovative ways to assist soldiers fighting on the ground with autonomous aircraft.
Raytheon saw its share price cut in half at the start of 2020, mostly due to its high stakes in the crippled aviation industry, but its share price has jumped almost 30% in 2021 so far. Raytheon has been investing heavily in robotics and luckily it has its substantial defense industry exposure keeping it afloat and softening the blow to its commercial aerospace segment. As the aviation industry is expected to recover as vaccinations are rolled out, so should Raytheon.
For the second quarter, Raytheon’s sales topped $15.9 billion, up 13% YoY. The company is banking on the aviation industry to come back strong by the end of 2021, forecasting sales to reach $65.4 billion for the full year. If this pulls off, it would make Raytheon a great investment.
The obvious bear case here is that if the reopening of the global economy and aviation industry does not go to plan, we may see another difficult year for Raytheon.
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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.
Contributing Writer at MyWallSt
Adam loves innovative SaaS tech companies; in particular ones that give people the freedom to make money or start a side hustle, like Etsy, Fiverr and Shopify.