Now could be a great time for investors to consider the best robotics stocks to buy in August. I wrote around a month ago that there could be record volatility in the market. That prediction turned out to be true, and volatility has since been decreasing. Decreased volatility generally leads to decreased fear and higher stock prices. Buying these best robotics stocks now could be a great option for investors to take advantage of short-term swings in the market.
Also, as the market expands, with projections estimating a growth to over $286 billion by 2032, investors are keen to identify companies that will benefit most from these advancements. Many of the best robotics stocks on this list are currently undervalued and could have substantial upside ahead for investors.
So here are three companies for investors to consider.
iRobot (IRBT)
iRobot (NASDAQ:IRBT) is famous for the Roomba vacuum cleaner and currently trades at a new low. There are substantial risks to investing in IRBT, but I feel that it is currently undervalued. Most of the risks come from the significant losses it has accumulated, including a $61.1 loss per share last quarter.
However, I am optimistic that IRBT stock can turn its fortunes around. The company has aggressively restructured its operations. This restructuring has also led to significant cost savings, including a 41% reduction in inventory year-over-year, and a narrowed operating loss in Q2 2024 compared with the previous corresponding period.
These measures are expected to improve its EPS substantially over the next two years, with EPS rising to a negative $1.20 by FY2026. The stock is certainly risky, but there is potential upside for investors as it trades at just 0.29x sales.
Cognex Corporation (CGNX)
Cognex Corporation (NASDAQ:CGNX) provides automation systems that aid in the processes of manufacturing and distribution. Effectively, its tech allows machines to capture and analyze visual information, which is crucial for high-tech manufacturing.
In Q2 2024, Cognex generated $239 million in revenue, down 1% YOY but up 14% sequentially from Q1 2024. Despite softness in its factory automation business, Cognex saw robust growth in its Logistics and Semiconductor markets.
It should be noted that various robotics and automation stocks have been pressured due to inflation, interest rates, geopolitical instability and being at a lower point in the business cycle. I believe then that investors should consider CGNX as a potential investment. For Q3 2024, Cognex expects revenue between $225 million and $240 million, with a slight decrease from Q2 2024 due to seasonal factors. However, its long-term view looks accretive due to automation likely playing a key role in manufacturing.
Intuitive Surgical (ISRG)
I have been very bullish on the potential of Intuitive Surgical (NASDAQ:ISRG) to maintain its market share whilst simultaneously growing its revenue and earnings over time. The company has an established foothold in the robotics surgery market. It currently holds the largest market share for the robotic surgery market at the time of writing.
The high switching costs of changing machines and manufacturers provide ISRG stock with a natural protective moat that will sustain its earnings and cash flow. The average outlay for one of ISRG’s machines starts at around $1.42 million, with additional training and maintenance fees included to be on top of that price. ISRG’s machines feature prominently in hospitals and it is working on developing more advanced robotics solutions in the future, such as with its Da Vinci 5 model.
I think that ISRG trades at a discount to its fair value given that it has momentum on its side, with its stock price increasing 41.77% year-to-date.
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.
On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.
