The 3 Most Undervalued Robotics Stocks to Buy in May 2024
The robotics industry is seeing tremendous growth driven by rapid technological advancements and increasing demand across multiple sectors. That has led to my list of undervalued robotics stocks to buy.
The global robotics market is poised for explosive growth, with projections indicating a rise from $76 billion in 2020 to a staggering $176 billion by 2025, representing an annual expansion rate of over 18%, according to Markets and Markets.
Robotics naturally bleeds into other growth sectors such as AI, industrial automation, Internet of Things (IoT) and many more industries. I feel that buying some shares of these undervalued robotics stocks could pay off very well in the future.
So, with that being said, here are three of the most undervalued robotics stocks for investors to buy in May this year. These companies likely won’t stay cheap for much longer, so acting quickly is essential.
Teradyne (TER)
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Teradyne (NASDAQ:TER) designs automated test equipment and robotics. Its electronic test segment ensures the functionality of semiconductors and electronic systems, while its industrial automation segment offers collaborative robotic arms and advanced control software.
For the fourth quarter of 2023, Teradyne reported revenues of $671 million, with the Semiconductor Test segment contributing $431 million, System Test $86 million, Wireless Test $25 million and Robotics $129 million
Teradyne provided an optimistic outlook for this year. The company expects revenues to range between $600 million and $700 million per quarter.
For the first quarter of 2024, Teradyne reported earnings per share of $0.51, surpassing analysts’ expectations. Analysts forecast that Teradyne’s earnings will grow significantly in 2024, with expected earnings per share increasing from $2.99 to $4.44, representing a growth rate of 48.49%.
With TER’s strong EPS forecast, one can’t go wrong with putting it on one’s watchlist as a potential investment.
Rockwell Automation (ROK)
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Rockwell Automation (NYSE:ROK) offers comprehensive industrial automation solutions, including industrial control systems and factory automation software.
One of Rockwell Automation’s key products is the FLEXLINE 3500 motor control center, launched at Hannover Messe 2024. This low-voltage motor control center delivers real-time operational and diagnostic data. The company’s offerings also include Emulate3D digital twin software, which reduces time to market and improves startup reliability and autonomous mobile robots (AMRs).
That is significant, as despite being touted as the future of the automotive industry, self-driving systems still have a significant flaw: They often return control to the human driver without enough time to avoid accidents when faced with unexpected situations. ROK’s solutions, therefore, help mitigate the risk significantly.
For 2024, Rockwell Automation expects continued growth, although it has slightly adjusted its full-year sales growth guidance to a range of -6.0% to -4.0%. The company projects earnings per share (EPS) to range between $12.27 and $14.79 for the fiscal year.
Elbit Systems (ESLT)
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Elbit Systems (NASDAQ:ESLT) focuses on defense robotics, including unmanned aircraft systems like the Hermes 900. This UAV can carry multiple payloads of up to 350 kg, including electro-optical and infrared sensors, laser designators and communication intelligence systems.
For better or worse, it seems that robotics in the defense industry saves more lives than it loses. Instead of boots on the ground, we have technicians in command centers, which looks to be the future.
Looking ahead to 2024, Elbit Systems provided optimistic guidance. The company expects earnings to grow by 24.80%, with EPS forecasted to increase from $6.33 to $7.90.
Analyst sentiment towards ESLT stock is generally positive, with a consensus Hold rating and an average price target suggesting potential upside.
I believe ESLT’s long-term trajectory is more optimistic than what these forecasts imply. It operates in a sector in hot demand for robotics, and that may only increase in the future.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
