Robotics continues to pique investors’ interest, and even more so as we enter a new age of artificial intelligence technologies. Automation has been a significant catalyst for the space. Whether we’re talking about manufacturing, logistics, surgical procedures, or everyday household tasks, robotics has helped to drive efficiencies and make life easier.
From an investor’s point of view, exposure to public companies that work in robotic automation just makes sense from an economic perspective, particularly when considering that robots have been a secular tailwind for many industries for some time now.
Of course, investors should be aware of risks. Globally high interest rates, economic uncertainty, and geopolitical conflicts have continued to wreak havoc on a multiplicity of equities markets. This means that not all companies will pursue their automation strategies, which will negatively impact a host of robotics stocks.
Below are three robotics stocks to sell by 2025.
iRobot (IRBT)
iRobot (NASDAQ:IRBT) made several of my “sell” lists in the past, and the way IRBT has plummeted nearly 81% since the start of the year has proven my point. The robotics firm specializes in robots for households. The automatic vacuum cleaner Roomba is one of the firm’s best-selling products. But inflation, coupled with high interest rates, tempered consumer spending on unnecessary goods. Moreover, the consumer technology glut that occurred during the pandemic years, due to many folks staying at home and buying a wide array of technology gadgets, put a dent into iRobot’s potential top-line growth.
To improve financial figures, iRobot announced a restructuring plan in January that the firm dubbed “iRobot Elevate,” which includes a host of operational cost-cutting measures. As a result in the second quarter of fiscal year 2024, iRobot was able to improve margins and significantly reduce its bloated inventory levels.
Still, this will most likely not be enough for the company to rebound. Now, iRobot faces competition from viable Chinese competitors. Narwal, a startup backed by Tencent (OTCMKTS:TCEHY) and ByteDance, is disrupting the consumer robotics market with small yet effective innovations, such as a self-cleaning mop, that will help it differentiate from competitors. Narwal’s high-end products compete directly in the price range of iRobot’s.
That said, despite all the operational turmoil, iRobot will also have to contend with new competitors.
Rockwell Automation (ROK)
Rockwell Automation (NYSE:ROK) is an industrial automation company that services various industries, including manufacturing and logistics. The firm’s “Intelligent Devices” business line includes several smart and robotic devices that make automation of industrial processes possible. For example, Rockwell’s “Allen‑Bradley” smart devices include advanced sensors with connectivity and data analytics capabilities for real-time monitoring and maintenance control.
Because inflation remains elevated and industrial firms have had to suffer through complex supply chain constraints, the demand for automation devices and services has increased. Unfortunately, despite solid, double-digit growth numbers over the past three fiscal years, order growth appears to be slowing, according to the company’s third-quarter earnings report for fiscal year 2024. This could be tied to the underwhelming consumer data we’ve seen over the past couple of months. As consumers pull back spending, industrial firms will see less demand and thus allocate less spending to automation updates.
Rockwell’s stock is down 17% since the start of the year, and a worsening demand environment could send it plunging even more.
PTC (PTC)
While PTC (NASDAQ:PTC) does not manufacture robots, the firm provides software product development tools to help manufacturers design and develop new innovations.
In particular, PTC is the creator of a 3D CAD technology Creo, which enables product designers to create and fine-tune 3D models of future products. The CAD technology also has generative design capabilities and can provide real-time simulations.
Similarly, Onshape is another 3-D cloud-based CAD product that comes with data management tools. Lastly, PTC has also developed an augmented reality technology called Vuforia that helps industrial businesses visualize digital information in a physical context.
The received a sizable Covid-19 bump to its top-line figures, no doubt from the demand for software products at that time. However, in 2022 and 2024, growth slowed to the high single-digit territory. Despite a round of solid earnings, the macroeconomic outlook for the software environment could pressure PTC shares in the future, especially as economic conditions worsen.
On the date of publication, Tyrik Torres did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
