Can the Stay-At-Home Trend Power iRobot Stock Even Higher?

You have to hand it to iRobot (NASDAQ: IRBT). The company has returned to form in 2020 and seemingly allayed fears that its margin and sales growth prospects were under threat due to intense pricing competition from rivals. The company's latest results were ahead of internal expectations and management gave an upbeat outlook for the second half. However, it's far from clear whether the excellent results are some sort of existentialist victory, or whether they are being driven by temporary factors. Let's take a look at what you need to know before buying the stock.

iRobot is hoping the market for robot vacuum cleaners will continue to grow. Image source: Getty Images.

Last year iRobot had a problem. The imposition of tariffs on products from China had increased its costs so the consumer discretionary company decided to increase prices. In comparison, its competitors decided to maintain prices. The result? iRobot suffered a sales shortfall in August and September compared to management's prior expectations. Consequently, iRobot was forced to cut prices back to pre-tariff levels and sales subsequently came back.

Source Fool.com