Dougherty & Co Starts iRobot Corporation (IRBT) at Buy
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Dougherty & Co initiated coverage on iRobot Corporation (NASDAQ: IRBT) with a Buy rating and a price target of $65.
Analyst Jon Fisher said, "IRBT is an accelerating growth company with growth driven by increased global market penetration of the company’s robot floor cleaning products (Roomba & Braava) and capturing market expansion opportunities in the U.S., Japan and China. We see the company’s high-teens revenue growth and 20%+ earnings growth as sustainable. We also believe that consensus expectations for revenue and earnings for both the current Q4’16 and upcoming 2017 are too low and are modeling above the consensus for both revenues and earnings in both periods."
"Our $65 price target is a P/E of 33x our 2017 EPS forecast and 26x our 2018 forecast both in-line with our projected earnings growth rates of 36% in '17 and 26% in '18. We believe the market is comfortable with a multiple reflective of IRBT's rapid growth and thus feel a PEG Ratio approximating 1x is justifiable. We believe the accelerating business momentum in 2016 is sustainable through 2017 and into 2018," added the analyst.
Shares of iRobot Corporation closed at $53.42 yesterday.
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