iRobot Shares Got Crushed: What You Need to Know

Updated

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of robot maker iRobot (NAS: IRBT) plunged a staggering 32% today after its full-year outlook came in well below Wall Street expectations.

So what: iRobot's fourth-quarter profit jumped 52% year over year, but a disappointing 2012 outlook is forcing analysts to seriously lower their valuation estimates. While its consumer segment continues to see strong growth, slowing sales to government agencies is triggering concerns over the company's long-term potential.

Now what: For 2012, iRobot expects EPS of $0.75-$0.95 on revenue of $465 million to $485 million, well below the consensus EPS estimate of $1.44 on a top-line of $532.7 million.

"As we look at 2012, we feel very good about the growth opportunity for our home robot business in 2012 and beyond," CEO Colin Angle said. "However, we expect a decline in top and bottom line in our (government and industrial) division this year due to our current limited visibility in our defense business."

Of course, given today's huge pullback, much of that uncertainty might already be baked into the price.

Interested in more info oniRobot?Add it to your watchlist.

At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of iRobot. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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