iRobot (IRBT -7.85%) stock isn’t having a great 2024. Since Amazon.com (AMZN 2.00%) confirmed in January that it will walk away from its deal to buy the Roomba maker, iRobot stock has fallen 40%.
It didn’t help that the company released its first financial report post-breakup on Feb. 26 showing sales down 14% and a $2.28 per-share loss in Q4. And now, things are getting worse. iRobot just gave investors guidance for Q1 2024, and its stock is down another 4.2% through 11 a.m. ET.
iRobot Q1 2024 earnings guidance
iRobot says Q1 sales will range from $137 million to $142 million, as much as a 14% decline year over year. Losses will be lighter than in Q4, but even so, iRobot will lose at least $2 per share (adjusted for one-time items) and perhaps as much as $2.13.
All of these numbers are worse than what Wall Street was expecting. According to TheFly.com, Wall Street still thinks iRobot will hold sales more or less steady at $158 million and lose less than $2 a share.
The good news is that the losses described so far are all non-GAAP. When calculated according to generally accepted accounting principles (GAAP), iRobot’s Q4 loss should range from no more than $0.09 to $0.22 per share.
Is iRobot stock a sell?
The other good news is that Q1 may be as bad as things get. While the company’s forecast for the rest of 2024 isn’t exactly optimistic, it’s at least less horrible. Gross margins should improve as the year progresses, and sales declines won’t be as dramatic. iRobot forecasts full-year sales between $825 million and $865 million — only a 3% decline in the best-case scenario.
Earnings will still be atrocious, however. The GAAP forecast is for a loss of $2.70 to $3.13 per share, similar in scale to the non-GAAP forecast for losses of $3.30 to $3.73. Given this prospect, I have zero interest in owning iRobot stock this year — and you probably shouldn’t, either.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and iRobot. The Motley Fool has a disclosure policy.
