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The robotics industry is booming, driven by rapid advancements and increasing demand across multiple sectors. Today, I’m highlighting two undervalued robotics stocks poised for significant future gains.

These undervalued robotics stocks are hidden gems with massive growth potential, making them must-have additions to your investment portfolio this May 2024!

Industry Outlook

The global robotics market is experiencing rapid and unprecedented growth, projected to leap from $76 billion in 2020 to an astounding $176 billion by 2025. This impressive expansion, with an annual growth rate exceeding 18%, is driven by significant technological advancements and increasing adoption across various industries. The robotics sector is not isolated in its growth; it intersects with several other booming fields such as artificial intelligence (AI), industrial automation, and the Internet of Things (IoT). These interconnected sectors are fueling the demand for robotics solutions, making the industry a hotspot for innovation and investment.

Given this robust growth trajectory, investing in robotics stocks presents a substantial opportunity for future gains. Here are three undervalued robotics stocks that are poised to capitalize on this market expansion and should be strong considerations for your investment portfolio:

iRobot (IRBT)

iRobot (NASDAQ:IRBT)

iRobot (NASDAQ:IRBT) is a prominent player in the home automation market, best known for its Roomba vacuum cleaners. In the first quarter of 2024, iRobot reported impressive revenues of $375 million, surpassing analysts' expectations due to robust sales of both Roomba and Braava product lines. The company projects its 2024 revenues to range between $1.4 billion and $1.5 billion. Moreover, earnings per share (EPS) are anticipated to rise significantly, from $1.25 to $2.10, marking a 68% increase. With its continuous innovation and strong market presence, iRobot remains a compelling investment opportunity.

ABB Ltd. (ABB)

ABB is a well-established player in the industrial automation sector. Recently, ABB's stock has surged by 23% over the past few months on the SWX, reaching yearly-high levels. With many analysts closely monitoring this large-cap stock, it’s likely that any price-sensitive news has already been absorbed into its current share price. But could there still be an investment opportunity here? Let's take a closer look at ABB's valuation and future outlook.

Is ABB Fairly Valued?

Based on our valuation model, ABB appears to be fairly valued at the moment. The stock is trading approximately 0.84% above our intrinsic value estimate, meaning that purchasing ABB shares today would likely represent a fair transaction. If you consider the company's intrinsic value to be CHF48.99, the potential downside risk is minimal should the price adjust to this valuation. Additionally, ABB's low beta indicates that its stock is less volatile compared to the broader market, providing some stability for investors.

What Does the Future Hold for ABB?

Investors seeking growth should pay close attention to ABB's future prospects. Acquiring shares in a robust company with a strong outlook at a fair price is always a wise investment strategy. ABB is projected to see profit growth of 30% over the next couple of years, suggesting a bright future. This anticipated increase in profits is likely to result in higher cash flows, potentially leading to a higher share valuation.

What This Means for You

If you're currently a shareholder, ABB's optimistic growth outlook seems to be reflected in its current share price. However, other crucial factors, such as the management team's track record, should also be considered.

Summary

These undervalued robotics stocks present substantial growth potential and could be excellent additions to your investment portfolio this May. Investing in these stocks now could lead to significant future gains, making them a smart choice for forward-thinking investors.

James Tan

Wealth Whisperer Wave

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