Aye, robot

Wall Street didn’t like what it saw from the firstquarter earnings report of irobot (Nasdaq: IRBT), maker of robotic Roomba vacuums, Braava mops and Terra lawn mowers. After revenue missed analysts’ expectations in late April, the market punished the stock, sending shares tumbling 23%. Long-term investors might want to treat this dip as a buying opportunity, though.

For one thing, revenue actually grew in the quarter by 9% year over year, and earnings surpassed expectations. Management noted stronger-than-expected demand for the high-end i7 and i7+ Roomba models in the U.S., despite recent price increases to help offset the impact of tariffs. It also touted a “very successful” launch during the quarter for the i7 and i7+ in the EMEA (Europe, Middle East and Africa) region, Japan and China.

The recent stock price drop has had shares trading near a price-to-earnings (P/E) ratio of 29, well below the five-year average of near 35.

Irobot has a massive addressable market — robotic vacuums recently controlled only about 23% of the high-end vacuum market — and plenty of room to grow. Its more than 200 U.S. patents and more than 400 international patents can further fuel innovation.

For investors who know enough to look beyond Wall Street’s overreactions and into the business’s fundamentals, irobot looks like a great growth stock, especially at this price. (The Motley Fool owns shares of irobot.)