Robotics is no longer just a sci-fi fantasy; it's transforming our world in real time. From enhancing manufacturing and logistics to revolutionizing healthcare and daily life, robots are widely used and are set to grow even more in the coming years.
With this burgeoning field ripe for growth, now might be an opportune time to consider investing in these three fundamentally strong robotics stocks: Intuitive Surgical, Inc. (ISRG), Fanuc Corporation (FANUY), and iRobot Corporation (IRBT).
Take Tesla, Inc. (TSLA), for example; they've recently integrated humanoid robots into their production lines, with CEO Elon Musk suggesting that these robots could eventually outpace automobiles in revenue generation. Meanwhile, Amazon.com, Inc. (AMZN) is ramping up its robotic workforce, utilizing 750,000 robots in its operations, a significant leap from previous years.
In addition, robots now carry out many functions in healthcare, including assistance with surgeries, supply delivery, and cleaning. From 2024 to 2031, the global robotics market is expected to expand at a CAGR of 16.6%, reaching $134.64 billion.
Moreover, investors' interest in robotics stocks is evident from the Global X Robotics & Artificial Intelligence ETF’s (BOTZ) returns of 34% over the past nine months.
With that in mind, investing in robotics company stocks such as ISRG, FANUY, and IRBT could be lucrative in the years ahead. Let’s look into their fundamentals in detail:
Intuitive Surgical, Inc. (ISRG)
ISRG designs, manufactures, and markets primarily the da Vinci surgical system and Ion endoluminal system and related instruments and accessories for invasive surgery worldwide. The company is known for its da Vinci surgical system, which is designed to assist surgeons in performing minimally invasive surgeries.
On June 5, 2024, the company received FDA approval for an updated da Vinci X and Xi label, confirming their use in radical prostatectomy. The approval is backed by real-world data showing that robotic-assisted surgeries offer similar long-term survival rates as traditional methods.
Commenting on this, Intuitive Chief Medical Officer Myriam Curet, M.D. said, “This is a significant step because it confirms non-inferiority for overall survival at 10 years for patients undergoing radical prostatectomy with the da Vinci surgical system.”
In March, ISRG received FDA clearance for its next-generation da Vinci 5 multi-port robotic system, applicable to all surgical specialties and procedures indicated for da Vinci Xi, with some exceptions. Such approval expands ISRG's market reach and reinforces its leadership in robotic-assisted surgery.
In the fiscal second quarter ended June 30, 2024, ISRG’s total revenue increased 14.5% year-over-year to $2.01 billion. The company’s non-GAAP gross profit stood at $1.41 billion for the quarter, up 16.9% from the prior-year period. Its non-GAAP income from operations came in at $754.10 million, indicating a 22.1% rise from the prior-year period. ISRG’s non-GAAP net income increased 26.4% year-over-year to $641 million, while its non-GAAP EPS grew 25.3% from the year-ago value to $1.78.
During the quarter, worldwide da Vinci procedures increased by 17% year-over-year, and ISRG placed 341 da Vinci surgical systems, similar to the 331 systems in the second quarter of 2023. As of March 31, 2024, ISRG's installed base of da Vinci surgical systems grew to 9,203, up 14% from 8,042 in 2023.
The consensus revenue estimate of $2.01 billion for the fiscal third quarter (ending September 2024) represents a 15% increase year-over-year. The consensus EPS estimate of $1.64 for the current quarter indicates a 12.2% improvement year-over-year. The company has an excellent earnings surprise history; it surpassed the consensus EPS estimates in each of the trailing four quarters.
Over the past nine months, the stock has surged 57.5%, closing the last trading session at $436.74. It has also gained 29.5% year-to-date.
ISRG’s stance is apparent in its POWR Ratings. The stock has a grade B for Sentiment and Quality. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
Among the 135 stocks in the Medical - Devices & Equipment industry, it is ranked #49. Click here to see the additional ISRG ratings (Growth, Value, Momentum, and Stability).
Fanuc Corporation (FANUY)
Based in Yamanashi, FANUY specializes in factory automation products and serves customers globally, including the Americas, Europe, China, and other parts of Asia. It offers CNC series products, servo motors, lasers, robots, compact machining centers, electric injection molding machines, wire electrical discharge machines, and ultra-precision machines.
On July 12, FANUC America Corporation, a subsidiary of FANUY, announced the completion of its new West Campus in Auburn Hills, Michigan. This state-of-the-art facility, built on approximately 270,000 square meters of land and representing a $110 million investment, is part of FANUC's strategic plan to bolster industrial automation in North America.
The West Campus features customized automation systems and a warehouse capable of housing over 6,000 robots and spare parts for rapid delivery. This new addition follows the establishment of the FANUC America Headquarters, the Chicago Office, and the North Campus.
During the fiscal year, which ended March 31, 2024, FANUY’s net sales amounted to ¥795.27 billion ($5.19 billion), up 3.1% from the forecasted ¥771.50 billion ($50.3 billion). The company’s operating income and net income for the period amounted to ¥141.92 billion ($926.29 million) and ¥133.16 billion ($869.12 million), respectively. Moreover, its net income per share was ¥140.23.
Street expects FANUY’s revenue for the fiscal year 2024 (ending March 2025) to increase 68.3% year-over-year to $5.14 billion. The company’s EPS for the current year is expected to grow 110.1% from the prior year to $0.10.
Shares of FANUY have gained 5.3% over the past nine months, closing the last trading session at $13.04.
FANUY’s POWR Ratings reflect this outlook. It has a B grade for Stability, Sentiment, and Quality. Out of 77 stocks, FANUY is ranked #56 in the A-rated Industrial - Machinery industry. To see the other ratings of FANUY for Growth, Value, and Momentum, click here.
iRobot Corporation (IRBT)
IRBT is a global consumer robot company that designs and builds durable robots and intelligent home innovation products that make life easier. Its portfolio of home robots and smart home devices features technologies for the connected home and advanced concepts in cleaning, mapping and navigation, human-robot interaction, and physical solutions.
On July 23, IRBT launched the Roomba Combo 10 Max Robot with the AutoWash™ Dock, its most advanced vacuum and mop. This 2-in-1 device autonomously handles refilling, recharging, washing, and self-cleaning. With iRobot OS and Enhanced Dirt Detect™ Technology, it identifies and targets heavy dirt areas up to 8 times more frequently for thorough cleaning. It’s also the first iRobot model to be compatible with the Matter smart home protocol and Apple Home ecosystem.
IRBT’s revenue for the first quarter that ended March 30, 2024, amounted to $357.87 million. Its operating income came in at $11.90 million, compared to an operating loss of $81.30 million. Similarly, the company’s net income amounted to $8.61 million or $0.30 per share versus the year-ago net loss of $81.11 million or $2.95 per share. Also, its net cash inflow from operating activities came in at $1.44 million, compared to an outflow of $94.51 million in the year-ago period.
Analysts expect IRBT’s revenue to increase 11.3% year-over-year to $207.25 million in the third quarter (ending September 2024). However, the company is expected to post a loss per share of $0.28 in the current quarter. Nonetheless, it topped the consensus EPS estimates in three of the trailing four quarters.
The stock has gained 86.8% over the past three months to close the last trading session at $12.85.
IRBT’s POWR Ratings reflect these prospects. It has a B grade for Growth and is ranked #33 out of 59 stocks in the Home Improvement & Goods industry.
Beyond what I’ve stated above, we have also given IRBT grades for Value, Momentum, Stability, Sentiment, and Quality. Get all the IRBT ratings here.
What To Do Next?
43 year investment veteran, Steve Reitmeister, has just released his 2024 market outlook along with trading plan and top 11 picks for the year ahead.
ISRG shares were trading at $442.86 per share on Friday afternoon, up $6.12 (+1.40%). Year-to-date, ISRG has gained 31.27%, versus a 15.34% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.
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