iRobot $IRBT is a tech company looking like a value stock. Is it really one?
iRobot is best known for its flagship product, the Roomba, the world's best-selling and most popular robotic vacuum cleaner.
While the sales of iRobot have been increasing in recent years, the stock price has not been doing so well and it is mainly for the following reasons:
1. Tariffs on Chinese goods - iRobot products are made in China. They have decided not to raise prices and this affected their margins
2. Increased competition from cheaper products leading to a reduction in market share
iRobot has addressed these issues by moving its manufacturing to Malaysia, albeit at a premium, and focusing on high-end products. Today, the company has a really good balance sheet with no debt at all.
Is it a good investment? It looks undervalued to me but I'll wait before making an investment. We need a margin of safety.