Dreams of a walking, talking robot assistant who can clean your room and make your meals may not be fantasy any more. The robotics industry offer future-looking investors an opportunity to get in early on a major disruptive trend.
Here we break down the barriers to see which are the best robotics stocks to buy, or sell!
The Pros and Cons of Buying Robotics Stocks
Promising Future: Most analysts agree that the robotics industry has a bright future.
Zion Market Research projects that the global industrial robotics market will reach $62 billion in revenue by 2024, nearly doubling from $33 billion in 2017.
Major Upside Potential: While robots are increasingly present in locations such as factories, they have yet to hit the mainstream for many consumer applications, such as self-driving cars. This means that investing in the right company at the right time could bring you some serious profit.
However, there is still significant risk when trying to figure out which robotics stocks are best to buy.
While the robotics industry as a whole may be a promising investment, buying stock in individual companies is a greater risk. It’s all too easy for one company’s shares to sink after losing ground to a newer, flashier competitor.
Higher premiums: Technology stocks tend to trade at higher premiums than most other market categories. This can make it more difficult for inexperienced investors to identify poor investments, because companies can be overvalued right until their shares begin to sink.
Is iRobot Stock A Buy?
Robotics designer and manufacturer iRobot [NASDAQ: IRBT] is best known as the creator of the Roomba, a robot vacuum cleaner that autonomously tidies up your home.
The company’s other offerings include the Braava robot for mopping floors and a robotic lawn mower that is currently in development.
As an investment vehicle, the foundations of iRobot [NASDAQ: IRBT] stock seem strong. Revenue grew by 24% in Q4 2018, and the company projects revenues of $1.3 billion for 2019, which would be a year-over-year growth rate of roughly 20%.
Note that iRobot [NASDAQ: IRBT] could face competition from SharkNinja, which released its own line of robotic vacuum cleaners.
However, the company’s diversification of its product line is a promising sign for future growth. In addition, with very few households owning a robotic vacuum cleaner, there’s certainly room for more companies entering the market.
Should You Buy Cognex Stock?
Cognex [NASDAQ: CGNX] is an industrial automation company that specializes in machine vision for robot workers in manufacturing.
Although the company lacks some of the name recognition and “sex appeal” of alternatives like iRobot [NASDAQ: IRBT], its financial numbers might cause you to take a second look.
In Q4 2018, Cognex revenue improved by 6% year over year to hit $193 million. The company currently has substantial cash reserves and no debt.
In addition, Cognex’s logistics business has grown by 50% since 2017, surpassing $100 million in annual revenues.
However, Cognex [NASDAQ: CGNX] has also updated its revenue projections for Q1 2019 to $165-175 million, which disappointed investors’ expectations of $177 million.
In addition, CEO Robert Willett cautioned that the company’s growth rate would slow throughout 2019, due to fewer purchases from China and the U.S. automotive sector.
Is FANUC Stock A Buy Or A Sell?
FANUC [TYO: 6954] is a Japanese manufacturing and robotics conglomerate.
The company is one of the world’s biggest producers of industrial robots, taking the top position in the U.S. and second place globally (behind the Swiss powerhouse ABB).
As one piece of good news, in 2018 FANUC announced the expansion or construction of three factories for producing its ROBOT, ROBOSHOT, and ROBOCUT machines.
In its 2018 annual report, the company revealed that it had net income of $1.7 billion and earnings per share of $8.86.
However, the report also warned that the company’s situation would remain “challenging and unpredictable as a whole” over the next year, due to uncertainties over international trade and fluctuating foreign exchange rates.
Without in-depth knowledge of FANUC, would-be investors might wish to pay close attention to news releases and future annual reports.
Best Robotics Stocks To Buy: Summary
The iRobot financial figures look strong. With low market saturation and a smart diversification strategy, the stock has plenty of growth potential.
Cognex may experience a slowdown in 2019, but the fundamentals and future of the company still appear solid.
Despite questions about the company’s current situation, FANUC is not a bad long-term investment. However, there are better options for investors looking to specifically purchase robotics stocks.
No matter whether you’re investing in a massive multinational firm or a tiny startup’s IPO, doing your research before buying is essential. Investing in robotics stocks requires a keen knowledge of the industry and a tolerance for risk to help you weather the market’s ups and downs.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.