Shares gained 135% last week.
- iRobot stock has gained a whopping 135% over the last five sessions, following news of the Trump administration considering an incentive plan for the robotics sector.
- Once on the verge of being acquired by Amazon, the Roomba has struggled since the 2022 deal fell through, with debt piling up and revenue and stock prices declining.
- iRobot has been in the market for a buyout but has failed to strike a deal so far.
Remember iRobot Corp.? One of the more famous Roomba sellers, iRobot, was once set to be acquired by Amazon.com, Inc. for $1.7 billion. But regulators rejected the deal on antitrust grounds, kicking off years of debt buildup and declines in revenue and stock price for the Bedford, Massachusetts-based company.
Although its market capitalization is currently a fraction of that figure and, in March this year, it issued a going-concern warning, it still survives. And now, the stock is on a roll. IRBT has gained a whopping 135% over the last five sessions, and is up 8.4% in premarket trading on Monday.
Stocktwits routinely brings you insights on stocks that are breaking out – the recent one was about watch company Fossil – and here’s how you should look at the iRobot rally.
Retail Says Bring It On
Retail investors were ecstatic, with sentiment rising since the start of December. The latest reading was ‘extremely bullish’ (87/100), with ‘extremely high’ message volume (94/100). In fact, chatter around IRBT has increased 3,600% over the past week.
Several users posted calls of “load up” and the expectation of a $20 price target. The stock had closed at $3.69 on Monday. Only two analysts currently have a rating on the stock, and they suggest “Hold,” with an average price target of $11.94, according to Koyfin.
Trump Push
So, what’s behind this sharp swing? For one, the Trump administration is preparing to launch a major support package to boost the robotics industry. News site Politico reported last week that the government is considering an executive order next year.
The plan would likely incentivize local manufacturing; Commerce Secretary Howard Lutnick recently met with robotics industry CEOs, and the Transport department is putting together a working group to study the proposals.
iRobot shares surged by over 73% on Wednesday, after the report. Richtech Robotics Inc., which makes industrial robots, gained over 18%, while Tesla rose 4.1%.
What’s more, iRobot is actively seeking a buyout, which presents a strong wait-and-see case for the stock. However, the company said in October that its search for a buyer had hit a substantial roadblock, and its financial condition remains dire, causing the stock to decline at the time.
Retail investors remain hopeful. “If this company is acquired, the stock price will be $20.”
For the year, however, IRBT has shed more than half its value.
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