The prevalence of robotics and its application is rapidly surging among organizations to boost their efficiency and productivity and for the adoption of the latest technologies. Robotics has emerged as a prominent force in modern industrial operations, and the trend is set to continue in the future.
Given the industry’s strong outlook, investors could consider solid robotics stocks Rockwell Automation, Inc. (ROK), Teradyne, Inc. (TER), and UiPath Inc. (PATH), which are automating industries.
Amid the rapid progress in artificial intelligence (AI) and machine learning (ML), coupled with surging demand for new innovations, labor shortage, and changing government regulations, the robotics market is well-positioned for expansion and growth in the coming years.
The increasing application of robotics around the world across various industries has been a boon to both consumers and enterprises. The industrial robot market has grown at a robust pace and is anticipated to continue growing as automation becomes ever more vital to businesses.
With this, revenue in the robotics market is projected to reach $46.11 billion in 2024, with service robotics dominating the market at $36.20 billion in the same period. Also, most revenue is expected to be generated in the US of $9.42 billion in 2024 compared to other regions.
Further, IMARC Group expects the global robotics market to reach $178.70 billion by 2033, exhibiting a notable CAGR of 16.4%. The market is growing rapidly, driven by rapid technological advancements in AI and ML, increasing labor shortages, and escalating demand for automation.
Given the industry’s robust outlook, investing in fundamentally strong robotics stocks ROK, TER, and PATH could be wise.
Let’s discuss the fundamentals of these stocks in detail:
Rockwell Automation, Inc. (ROK)
ROK offers industrial automation and digital transformation solutions internationally. The company operates in three segments, Intelligent Devices; Software & Control; and Lifecycle Services. The company’s solutions include hardware and software products and services.
On November 20, ROK and Microsoft Corporation, a leading global technology company, expanded their strategic collaboration aimed at revolutionizing industrial transformation. Under the partnership, the companies will provide manufacturing customers with advanced cloud and AI solutions.
The strategic partnership is aimed at delivering advanced cloud and AI solutions, empowering manufacturers with enhanced data insights, operational efficiency, and sustainable growth across the industry.
On November 12, ROK announced its integration with NVIDIA Omniverse application programming interfaces into its Emulate3D™ digital twin software to enhance factory operations through artificial intelligence and physics-based simulation technology.
ROK reported sales of $2.04 billion for the fourth quarter that ended on September 30, 2024, and its gross profit was $770.60 million for the period. The company’s adjusted income and adjusted EPS came in at $281.90 million and $2.47 for the quarter, respectively.
Analysts expect ROK’s revenue and EPS for the fiscal year (ending September 2026) to increase 8.4% and 18.6% year-over-year to $8.82 billion and $11.24, respectively. Further, the company has topped the consensus EPS estimates in three of the trailing four quarters.
ROK’s stock has surged 10.8% over the past month and 15.5% over the past six months to close the last trading session at $298.70.
ROK’s solid outlook is reflected in its POWR Ratings. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
The stock has a B grade for Momentum and Quality. Within the A-rated Industrial - Machinery industry, ROK is ranked #72 among 79 stocks.
Click here to access additional ratings of ROK (Stability, Value, Sentiment, and Growth).
Teradyne, Inc. (TER)
TER designs, develops, manufactures, and sells automated test systems and robotics products globally. The company operates in four segments; Semiconductor Test; System Test; Robotics; and Wireless Test. The company offers products and services for wafer level and device package testing of semiconductor devices.
On October 22, TER’s wholly owned subsidiary LitePoint, a leading provider of wireless test solutions, and Pegatron 5G, a leading provider of end-to-end 5G product solutions, entered into a collaboration to drive the future of 5G. Recently, Pegatron leveraged LitePoint’s IQFR1-RU O-RAN test system to demonstrate the advanced 2 Carrier Components (2CC) capability.
2CC allows the combination of two component carriers on the downlink, which significantly enhances data throughput and capacity. This capability improves the delivery of high-performance 5G services in dense urban environments and other areas with high demand.
For the third quarter that ended on September 29, 2024, TER’s net revenues increased 4.8% year-over-year to $737.30 million. Its gross profit rose 9.6% from the prior year’s period to $436.51 million. The company's non-GAAP income from operations of $165 million reflects growth of 6% from the previous year's quarter.
Furthermore, the company’s non-GAAP net income stood at $147.60 million or $0.90 per common share, up 12.2% and 12.5% year-over-year, respectively.
Analysts expect TER’s revenue for the fourth quarter (ending December 2024) to increase 10.4% year-over-year to $740.58 million. For the same period, its EPS is expected to grow 14.8% year-over-year to $0.91. Further, the company topped the consensus EPS estimates in all trailing four quarters.
Over the past year, the stock has gained 20.4% to close the last trading session at $110.67.
TER’s sound fundamentals are reflected in its POWR Ratings. TER has a B grade for Quality. It is ranked #51 among the 90 stocks within the Semiconductor & Wireless Chip industry.
To see the other ratings of TER for Value, Momentum, Stability, Sentiment, and Growth, click here.
UiPath Inc. (PATH)
PATH provides an end-to-end automation platform offering a diverse range of international robotic process automation (RPA) solutions internationally. It provides a suite of interrelated software to build, manage, run, engage, measure, and govern automation within the organization.
On October 23, PATH announced that Banco Azteca is transforming its operations and achieving significant efficiency gains with the strategic implementation of its AI and automation. With the integration of PATH’s platform, Banco attained unparalleled speed and accuracy in processing high-volume tasks and boosted productivity by over 50%.
On the same date, the company announced the successful implementation of its Platform by the La Française des Jeux. The platform will revolutionize key business processes of the company through three innovative projects.
During the second quarter that ended July 31, 2024, PATH’s total revenue rose 10.1% from the year-ago value to $316.25 million. Its non-GAAP gross profit grew 6.6% from the prior-year quarter to $263.18 million. Also, the company’s non-GAAP net income totaled $23.76 million or $0.04 per share for the quarter, respectively.
In addition, as of July 31, 2024, the company's non-GAAP adjusted free cash flow was $149.78 million.
For the fiscal year (ending January 2026), analysts expect PATH’s revenue to grow 11% year-over-year to $1.58 billion. For the same year, the company’s EPS is expected to increase 10.4% year-over-year to $0.44. Also, it has surpassed the consensus revenue and EPS estimates in each of the trailing four quarters, which is remarkable.
PATH’s stock has surged 16.1% over the past month to close the last trading session at $14.50.
PATH’s POWR Ratings reflect its promising prospects. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system.
PATH has a B grade for Quality. It is ranked #10 among 18 stocks in the A-rated Software - SAAS industry.
In addition to the POWR Ratings I’ve just highlighted, you can see PATH’s ratings for Stability, Momentum, Sentiment, Growth, and Value here.
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ROK shares were trading at $294.09 per share on Tuesday morning, down $4.61 (-1.54%). Year-to-date, ROK has declined -3.51%, versus a 27.23% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
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