iRobot Investors: So You're Tellin' Me There's A Chance

• In a report issued Tuesday, analysts at Canaccord reiterated a Buy rating and $40.00 price target on shares of iRobot Corporation IRBT.
• They viewed trimmed 2015 guidance as “a buying opportunity” and expected Wednesday’s likely pullback for the stock to be short-lived.
• Shares of iRobot were down 3 percent on Wednesday.

In a report issued Tuesday, Canaccord analysts Bobby Burleson and Prabh Gowrisankaran looked into iRobot after its earnings call, which took place after the market closed. In a note last week, the analysts were “cautious about Q4’s seemingly high hurdle necessary to achieve previous 2015 guidance,” a view they believe was generally held. In the meantime, they noted, “investors are likely to shift their focus to positive drivers in 2016, including strong consumer robot demand on the Roomba 980 and better Defense and Security trends.”

A Look Into Results

The report went on to look into the company’s third-quarter financial results announced on Tuesday. Earnings came in at $0.42 per share on revenue of $143.6 million. While revenue came short of the firm’s and consensus expectations of $144.5 million and $145.34 million, respectively, earnings widely beat estimates of $0.22 per share (Canaccord’s estimate) and $0.23 per share (consensus).

Revenue came in at the lower end of the management’s $143 million to $146 million guidance, while EPS comfortably surpassed projections, which called for EPS between $0.20 and $0.24. “Earnings for the period exceeded expectations due to a decision to curtail a planned investment in Japan as a result of uncertainty in the region,” the analysts added.

Looking forward, management team trimmed its full-year revenue guidance from a range of $625 million to $635 million to a range of $610 million to $615 million, on the back of challenges faced in Japan and “uncertainty in other international markets.” On the other hand, they raised EPS and adjusted EBITDA outlook.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.