iRobot Shares Jump on DoD Contract Win - Analyst Blog

Robot maker iRobot Corporation IRBT witnessed a 3.9% rise in share price to settle at $38.29 on Apr 16. The hike came after the company secured a $59.2 million contract from the Department of Defense (DoD). iRobot is one of the 13 companies which have been awarded contracts worth $2.79 billion.

Per the contract, iRobot will supply Man Transportable Robotic System (MTRS) production systems. The MTRS is predominantly used by explosive ordnance disposal technicians for diffusing explosive devices. Along with this, the company will provide spare kits, depot repair services, depot level repair parts, parts supply, training, configuration management, approved accessories and engineering enhancements.

The contract requirements are expected to consummate by Apr 2015. The DoD conferred the contract for the Naval Surface Warfare Center, Indian Head Explosive Ordnance Disposal Technology Division.

iRobot is expected to benefit largely given the scope of the contract. The company will release its first-quarter 2014 results on Apr 22, after the market closes. In the last quarter, the company delivered in-line results with earnings per share coming in at 11 cents.

For first-quarter 2014, our proven model does not conclusively show that iRobot is likely to beat earnings. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. iRobot currently carries a Zacks Rank #3 (Hold) and has an Earnings ESP of 0.00% (Most Accurate estimate and the Zacks Consensus Estimate stand at 16 cents)

Some better-ranked stocks in the industry which can be considered for investment include The Middleby Corp. MIDD, Kadant Inc. KAI and Altra Industrial Motion Corp. AIMC. While Middleby and Kadant sport a Zacks Rank #1 (Strong Buy), Altra Industrial Motion holds a Zacks Rank #2 (Buy).