27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Roomba maker iRobot Corporation (NASDAQ:IRBT) stock was downgraded by Cannacord Genuity following a run-up in price that may have the stock overvalued amid concerns about tariffs and the marketing of a new robotic lawn mower.
The Analyst
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Cannacord Genuity’s Jed Dorsheimer downgraded iRobot from Buy to Hold and lowered the price target by $1 to $114.
The Thesis
Dorsheimer said iRobot’s new Terra robot mower is exciting, but the company’s success with new products in the past has been mixed.
The Terra is in a different category than iRobot's better-known indoor cleaning robots Roomba and Braava, which could make it necessary to spend more on marketing to get customers familiar with the Terra, the analyst said.
Tariff Fears
The company uses Chinese manufacturers, which raises tariff concerns, Dorsheimer said. If higher tariffs go into effect, iRobot has said it will adjust its product prices accordingly, he said.
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That could be a threat to Wall Street's earnings estimates for iRobot, the analyst said.
Some of the concern comes from the strength in the stock, Dorsheimer said. Shares have risen in recent months, and the analyst attributes the move to better than-expected fourth-quarter earnings, the Terra announcement and high short interest.
The company is interested in using the home-mapping data that its robot vacuums create for broader internet-of-things applications, Dorsheimer said, adding that it's not yet clear how iRobot intends to monetize its networking capabilities.
“We would look to become more constructive on IRBT shares at a more compelling valuation, or as we see the above points becoming derisked."
Price Action
Shares of iRobot were up 0.22 percent at $119.65 at the time of publication Tuesday.
Related Links:
iRobot Shares Likely To Be Less Volatile Post-Q4 Print, Analyst Says
Photo courtesy of iRobot.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.