As technology continues to advance at an unprecedented pace, robotics stands at the forefront of innovation. It can revolutionize industries from manufacturing to healthcare.
There’s currently a low concentration rate for robotics in the surgical market. Therefore, a few companies stand out with the potential to turn into multi-baggers.
Further, they hold attractive market positions, with low valuations and high visibility for future growth. In this February edition, we highlight three robotics stocks with the potential to multiply investors’ returns.
Intuitive Surgical (ISRG)
Intuitive Surgical (NASDAQ:ISRG) is a pioneer in robotic-assisted surgery. It is known for its Da Vinci Surgical System, which enhances surgical precision and dexterity.
Investors have good reason to feel bullish about ISRG stock. In terms of financial performance, ISRG beat Wall Street estimates for Q4 revenue and profit. This is attributed to a recovery in surgeries which increased demand for its minimally invasive robotic systems. Also, the company applied to the Food and Drug Administration (FDA) for its new surgical robot, the Da Vinci 5.
For investors, Intuitive Surgical’s stock has shown significant growth. After starting the year at $337.36, ISRG shares have increased by 15.3% and are now trading at $389.07. This performance is part of a longer growth trend, one which investors will enjoy for years to come.
Wall Street analysts have a moderate buy consensus on ISRG shares. And, price targets range from $270 to $435, averaging at $371.
So, due to early stage robotics in surgeries, ISRG can explode in price later, despite its already substantial market cap.
iRobot (IRBT)
iRobot (NASDAQ:IRBT) is another one of those robotics stocks that investors should have on their radars.
Financially, iRobot anticipates a need to right-size its cost structure while continuing to innovate, particularly in its floor care solutions. The goal is to reinvigorate the brand and product performance.
There are some challenges that IRBT stock that’s facing which I think is providing a hefty discount to its stock price.
The company’s recent performance, including a 25% reduction in revenue in 2023 compared to the previous year and significant operating losses, illustrates the challenges IRBT faces. Nevertheless, the company ended 2023 with $185 million in cash and cash equivalents. Furthermore, it has plenty of runway to give it time to reach breakeven profitability.
Analysts expect incremental EPS improvements over the years, as well as a swelling top-line that’s expected to reach 1.05 billion by FY2025.
Trading at just 0.34 times sales, that’s far below the median of its peers. I believe this reflects its undervalued nature. Therefore, it’s one of those potential multibaggers that investors could add to their portfolios.
ABB Robotics (ABB)
ABB (NYSE:ABB) is a Swiss multinational corporation operating mainly in robotics, power, heavy electrical equipment, and automation technology areas.
The company anticipates low to mid-single-digit comparable revenue growth in Q1 of 2024. And, the Operational EBITA margin is expected to remain stable or slightly improve YOY. For the full year 2024, ABB projects a positive book-to-bill ratio. The comparable revenue growth is estimated at 5%. Also, Operational EBITA margin is anticipated to improve from the previous year slightly.
Additionally, ABB has expanded its leadership in next-generation AI-enabled mobile robotics by acquiring Swiss startup Sevensense. Sevensense’s AI-based navigation enables high levels of speed, accuracy, and autonomy for mobile robots.
Thus, trading at just 21 times earnings, huge potential exists for ABB to become a potential multi-bagger for investors.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
