Wall Street Favorites: 3 Robotics Stocks With Strong Buy Ratings for May 2024
In 2022, the International Federation of Robotics (IFR) reported a new record of nearly 3.9 million robotic units in operation across industries. This placed the average robots per 10,000 human workers at 151. Since this record, the automation revolution has shifted to incorporate advanced machine learning and artificial intelligence (AI).
Rather than displacing workers, the trend toward augmentation via collaborative robots or cobots. For example, Hirebotics’ Cobot Welder managed to boost the welding production by 10x at DeAngelo Marine Exhaust firm.
Also, productivity from fixed automation in industrial settings has been unleashed toward flexible and mobile manipulators like TIAGo Pro from PAL Robotics. These innovations are changing the game on how we view work. For investors looking at robotics stocks to buy, this translates to a 24.4% CAGR between 2022 and 2030, per ResearchAndMarkets forecast.
Let’s explore some Wall Street favorites that are venturing forth into the world of robotics.
Tesla (TSLA)
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Electric vehicle (EV) manufacturer Tesla (NASDAQ:TSLA) is suffering a steep devaluation pressure. Year-to-date (YTD), TSLA stock is down 32%. At the present level of $174.74, shares are close to its 52-week low of $138.80 and far from the 52-week high of nearly $300 per share. With these contrasting levels, investors typically see the stock as discounted.
The EV demand, especially for luxury EVs, is cratering amid inflationary pressures. However, this is likely to be remedied with Tesla’s upcoming $25k entry hatchback dubbed Model 2. Also, Elon Musk may surprise investors on August 8th, when he is set to excite shareholders with robotaxis.
In fact, Tesla is making progress in robotics, not only in the automation of gigafactories but also in the creation of the more exciting Optimus Gen 2 humanoid robot. Comparable to industry leader’s Boston Dynamics, the model is positioning itself as a solid platform for delicate, unsafe and repetitive tasks.
And, Tesla already has rich experience in scaling production of complex machinery. Moreover, the company has an advantage in machine learning through the massive collection of data for its Full Self-Driving (FSD) effort. By leveraging these software and hardware assets, this makes Tesla a solid pick for robotics stocks to buy.
ABB Ltd. (ABBNY)
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In the absence of German Beckhoff Automation GmbH being a publicly traded company, ABB Ltd. (OTC:ABBNY) is a good substitute.With half a century worth of experience, the Swiss company supplies the entire industry with high-end automation solutions in over 50 countries.
ABB Ltd.’s notoriety for robotics excellence is such that Microsoft formed a strategic partnership with the firm in October 2016.
In April, ABBNY released its Q1 of 2024 earnings, showing 5% decline in orders but an 8% year-over-year (YOY) increase in gross profit. This indicates both efficiency improvements and reliance on higher-margin products. The latter often fortifies companies’ market resilience because they can better withstand demand fluctuations. ABB Ltd is no exception.
This is demonstrated when ABBNY saw net income decrease by 13% from the year-ago quarter, it increased free cash flow by 240%. These figures contributed to ABBNY stock gaining nearly 20% in the last three months.
The price boost is likely to be corrected since the company is largely unknown to the wider public as an ADR stock. But with that in mind, investors should put ABBNY on a robotics stock watchlist.
Helix Energy Solutions Group, Inc. (HLX)
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Despite environmental trends focusing on renewables, modern civilization would collapse without oil and gas. Helix Energy Solutions Group, Inc. (NASDAQ:HLX) is a big player in the industry’s robotics needs. Primarily offering specialty services to Gulf of Mexico energy companies, HLX is called when well interventions, decommissioning or maintenance are needed.
The company’s division of Helix Robotics is responsible for a wide range of subsea and trenching services. This unique combo of rare human and hardware capital makes HLX indispensable. At the end of April, it delivered its Q1 of 2024 earnings, showing a net loss of $26 million.
Despite the robotics vessels’ utilization dropping to 74% from 91% a year-ago quarter, Helix increased gross profits by 16%. Across divisions, the company increased its free cash flow to $61 million compared to $12 million loss in Q4 2023. From the full-year revenue of $1.29 billion in 2023, Helix expects $1.2 – $1.4 billion total revenue for full-year 2024.
Like ABBNY, HLX stock gained 20% of value in the last three months. At $11.31, HLX stock is 45% above its 52-week low of $6.18. Nasdaq’s average HLX price target is $15.5 with the low estimate close by at $15 per share.
On the date of publication, Shane Neagle did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
