The robotics industry seems to be at the cusp of recovery in 2021 and beyond as the world adjusts to new trends post pandemic. Notably, as the COVID-19 pandemic led to the practicing of social distancing norms, the demand for robotics and automation increased. Moreover, even after the pandemic is over, such trends are expected to continue as the rapid shift to digitization maintains its upward trajectory. In fact, Elisabeth Reynold, the executive director of Massachusetts Institute of Technology’s task force on the work of the future, stated that some firms, which have learned to maintain productivity with fewer workers will not be willing to unlearn it, as quoted in a Financial Times article.
Automation was already an area of focus before the pandemic. Notably, in areas such as manufacturing, robotics has been an integral part of the process. In healthcare too, robotic surgery has been rapidly gaining traction, owing to the precision that it offered. Notably, the global surgical robotics market is expected to witness a CAGR of about 21% during 2021 to 2026, per a report by Express Market Research. However, because of the pandemic, the usage of robots in other areas of healthcare also increased as they are being used to maintain social distancing while ensuring continued interaction between doctors and patients.
Notably, the International Federation of Robotics (“IFR”) mentioned in a report that mobile robots are being extensively used during the pandemic for delivering supplies in hospitals and provide support to doctors while performing temperature checks and others. IFR projected that this category will witness the strongest growth in the professional robot sector and is estimated to witness 97% average annual growth in unit sales between 2020 and 2023. Moreover, robots and drones are also being used as an effective way of delivering goods.
Meanwhile, the IFR report also estimated that cleaning robots are set to be the second fastest category in the professional robot sector in terms of sales. Cleaning robots are expected to grow “at 41% on average between 2020 and 2023.” This is because cleaning robots are being deployed to disinfect surfaces of hospitals, supermarkets and public transport. Moreover, robots have also become popular in the personal and domestic space. Research and Markets predict that the household robot market is set to witness a CAGR of 20.5% over the period of 2020 to 2025, as mentioned in a Business Wire article.
Separately, the demand for industrial robotics in automotive and electronics is set to make a comeback in 2021, following the slump last year due to the pandemic. Per a report by Robo Global, by the end of 2021, the installed base of factory robots is estimated to exceed 3.2 million units which will be double the level seen in 2015.
5 Stocks to Watch
The robotics industry seems poised to make a comeback with the COVID-19 pandemic bringing in changes that are here to stay. This makes it a good time to look at robotics names that can benefit from this trend going forward. We have selected five such stocks that carry a Zacks Rank #1 (Strong Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Brooks Automation, Inc. BRKS provides manufacturing automation solutions for the semiconductor industry, and life science sample-based services and solutions for the life sciences market worldwide. Under the Brooks Semiconductor Solutions Group, products include atmospheric and vacuum robots, robotic modules, and tool automation systems that offer precision handling and clean wafer environments, among others. The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings increased 25.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 18.6%.
iRobot Corporation IRBT designs, builds and sells robots to the consumer market in the United States, Europe, the Middle East, Africa, and internationally. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 16.2% over the past 90 days. The company’s expected earnings growth rate for the next five years is 15%.
Rockwell Automation, Inc. ROK provides industrial automation and digital transformation solutions. The Architecture & Software segment offers a portfolio of automation and information platforms, including hardware and software. Its products include programmable automation controllers; design, visualization, and simulation software, among others. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 9% over the past 60 days. The company’s expected earnings growth rate for the current year is 12.5%
Stryker Corporation SYK operates as a medical technology company. The company operates through three segments: Orthopaedics, MedSurg, and Neurotechnology and Spine. TheMedSurg segment offers surgical equipment and surgical navigation systems, endoscopic and communications systems, patient handling, among others. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 2.9% over the past 90 days. The company’s expected earnings growth rate for the current year is 26.7%.
Ambarella, Inc. AMBA develops semiconductor processing solutions for video that enable high-definition, video capture, analysis, sharing, and display worldwide. Its solutions enable the creation of video content for wearable cameras, automotive cameras, drones and virtual reality cameras, as well as Internet Protocol security cameras for professional use and home security and monitoring. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its next-year earnings increased 30% over the past 60 days. The company’s expected earnings growth rate for next year is 92.6%.
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