Notes from iRobot (IRBT) Analyst Day - Needham & Company

Needham & Company analyst, James Ricchiuti, attended the iRobot Corporation (NASDAQ: IRBT) analyst day. The key takeaway was the recognition that the main driver to its business for the foreseeable future is likely to be its home robot business, including the next-gen Roomba 980 with upside opportunities from wet floor care and robotic lawn mowers. Notes follow:

Having seen strong results from TV advertising this year, IRBT plans to step up ad spending in Q4. The TV campaign in the 3 weeks leading up to Mother's Day this year produced a 101% increase in retail unit off-take over the same period a year earlier. IRBT is clearly upping the ante for Roomba, having seen strong results from TV advertising campaigns this year and plans additional TV-ad spending in Q4. Mgmt sees an immediate addressable market opportunity for Roomba that is ~4x the current robotic vacuum cleaner installed base in the U.S.

IRBT appears likely to move forward with a robotic lawn mower, initially we believe targeting an existing market for robotic lawn mowers in Europe, a market currently estimated at $200M.

Management did not spend much time on the Defense & Security (D&S) business, which is currently only 4% revenue. However, IRBT is pursuing two large programs of record (CRS-1 and CLARK).

Ricchiuti believes there is significant runway for growth with Roomba, and he maintains his Buy rating and $38 PT.

For an analyst ratings summary and ratings history on iRobot Corporation click here. For more ratings news on iRobot Corporation click here.

Shares of iRobot Corporation closed at $31.59 yesterday.

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