iRobot's Bear Turn: How Did We Get Here
iRobot Corporation (IRBT), the Bedford, Massachusetts-based robotics company, gradually defined itself as a home products company, spinning off most of its other product lines. This branding effort correlated with an increase in value, as IRBT spent most of 2016 and 2017 in a steady growth pattern. However, in September 2017 short sellers stoked fears about a competitor named SharkNinja. With the stock falling more than 20% from its recent high, high valuations and increased competition make IRBT an equity to avoid for the foreseeable future for any investor or institution positioning for appreciation.
iRobot and its home products are slowly establishing a foothold in the everyday lives of Americans. IRBT has specialized in vacuum cleaners and has produced the most commercially successful household robot to date. Even with competitors beginning to introduce alternatives, Roomba vacuum cleaner holds a market share of about 85% in North America and more than 60% in Europe. Although some key patents expire in 2019, it may not materially hurt the company as the company has improved its navigation and clearing features since the patent was instituted.
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