IRobot To Boost Robotic Business With Amazon Web Services

Premium consumer goods organization iRobot Corporation (NASDAQ:IRBT) announced that that it would be using Amazon (NASDAQ:AMZN) Web Services (“AWS”) to address cloud robotics technologies in a more planned manner. AWS would help in augmenting the company’s connected home and consumer business growth. The decision is taken by the company to boost its robotics business and is in sync with its innovation-based growth strategy.

AWS Cloud helps companies develop unique connected products that are highly demanded by customers. The unique AWS Cloud infrastructure would help iRobot create connected robotic technologies with greater efficacy. Hence, it would help in extending the worth of robots in smart homes.

We expect the application of AWS Cloud to enhance iRobots’ existing robotic expertise. To date, the company has sold as many as 15 million robots worldwide. The company achieved an important milestone in breakthrough technology in Sep 2015 with the launch of Roomba 980, which maps homes systematically.

In first-quarter 2016, iRobots’ Home Robots segments’ revenues jumped 15% year over year. The upside was supported by higher U.S. home robotic demand. The company forecasts roughly 12–13% growth in Home Robot revenues by year-end 2016 on higher U.S. and Chinese robotic businesses. The company’s decision to use AWS Cloud to create more productive home robots should further support top-line growth.

Stock Price and Zacks Rank

iRobot’s share price currently stands at $36.02 per share as of Jul 13, 2016, up 3.6% since its first-quarter earnings release in Apr 26, 2016. We anticipate the aforesaid announcement to further boost investors’ confidence on the stock.

iRobot currently carries a Zacks Rank #3 (Hold). The company posted robust results in first-quarter 2016, successfully spun off its Defense & Security segment and is boosting its Home Robotics business with new product innovations. However, its business remains exposed to certain headwinds such as high volatility in consumers’ brand loyalty, lower wage growth and high income inequality in the U.S. alongside lackluster economic performance in booming markets.

Stocks to Consider

Some better-ranked stocks in the industry include Belmond Ltd. (NYSE:BEL) , Barnes & Noble (NYSE:BKS) Education, Inc. (NYSE:BNED) and Boyd Gaming Corporation (NYSE:BYD) . All the three stocks presently hold a Zacks Rank #2 (Buy).

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