A Look at iRobot’s (IRBT) Valuation After End of Sale Talks and Mounting Bankruptcy Risks

Shares of iRobot (IRBT) plunged 33% after the company disclosed its last potential buyer has exited negotiations. This leaves iRobot without any active discussions for a sale or strategic partnership.

See our latest analysis for iRobot.

It’s been a bruising ride for iRobot shareholders recently, with the stalled company sale and ongoing bankruptcy fears accelerating a decline that has been in motion all year. After this latest blow, the 7-day share price return stands at -34.33%, pushing the year-to-date return to a staggering -61.26%. Over the longer term, total shareholder returns have slumped even more, with a 5-year loss of 96.33% reflecting fading momentum and deepening investor concern about the company’s future.

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With shares now trading at a fraction of analyst targets and uncertainty hanging over iRobot's future, investors are left to consider whether the market is overlooking a turnaround or if all the risks are already fully priced in.

Price-to-Sales Ratio of 0.2x: Is it justified?

With iRobot’s price-to-sales ratio at just 0.2x, the market evaluates the company at half the sales multiple of its peer group and a third of the broader industry. The last close of $3.08 is well below what peer and sector valuation signals might suggest, reinforcing the perception that investors are highly skeptical about future growth and profitability.

The price-to-sales ratio compares a company’s market capitalization to its revenue, offering a snapshot of how much the market is willing to pay for each dollar of sales. For a business like iRobot, which has negative earnings and is struggling to regain profitability, this metric becomes especially important and shines a light on whether revenue is being valued at a discount due to risk or future uncertainty.

At 0.2x, iRobot’s sales are priced lower than both its peer group average of 0.4x and the US Consumer Durables industry average of 0.6x. This deep discount may reflect concerns about declining revenue prospects, mounting losses, and strategic instability. If market sentiment improves, there is considerable room for the valuation multiple to rebound toward the industry benchmark.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Sales of 0.2x (UNDERVALUED)

However, iRobot’s ongoing losses and uncertain revenue outlook could further weigh on investor confidence if profitability does not stabilize in the near term.

Find out about the key risks to this iRobot narrative.

Build Your Own iRobot Narrative

If you want to see the story from another angle or dig into the numbers yourself, it only takes a few minutes to build your own perspective. Do it your way

A great starting point for your iRobot research is our analysis highlighting 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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