While robots in the past were used mostly in industrial applications, robotics are now being employed for security, health care, aerospace, food and beverage uses, and education. More industries are starting to rely on automation to dramatically improve their efficiencies. Amid these advances, market research analysts have forecast the robotics market will expand to $214.7 billion by 2030, growing at a compound annual growth rate (CAGR) of almost 23%.
With such an increasing investment opportunity, robot and automation stocks, as represented by the ROBO Global Robotics and Automation Index ETF (ROBO), an exchange-traded fund (ETF), have outperformed the broader market. The ETF has delivered a total return of 5% over the past 12 months, higher than the relatively flat performance of the S&P 500 Index, up 0.3% in the same period.
Here are the top three robotics stocks in each category: best value, the fastest growth, and the most momentum. The market performance numbers above and all company stock price data in the tables below are as of April 24, 2023.
Best Value Robotics Stocks
These are the robotics stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows that you're paying less for each dollar of profit generated.
But such stocks also could turn out to be a classic case of a value trap—a stock that attracts investors looking for a bargain because it seems inexpensive, relative to historical valuation multiples of the stock or versus industry peers, but that may continue to languish or drop further after an investor buys shares in the company.
|Best Value Robotics Stocks|
|Price ($)||Market Capitalization (Market Cap) ($B)||12-Month Trailing P/E Ratio|
|Azenta Inc. (AZTA)||42.98||3||1.6|
|Qualcomm Inc. (QCOM)||117.76||13.1||11.4|
|Deere & Co. (DE)||386.70||114.6||14.3|
- Azenta Inc.: Rebranded from Brooks Life Sciences Services and Products, Azenta provides analytics, sourcing, logistics, and informatics for scientific sample exploration and management. Azenta’s P/E ratio is reflective of its slowing organic revenue growth, which declined 1% year-over-year in the first quarter of 2023. At the same time, Azenta announced an accelerated share repurchase agreement valued at $500 million that is to be completed by the end of the third quarter, signaling that the shares might be undervalued at these levels.
- Qualcomm Inc.: A global semiconductor and telecommunications company that designs and markets wireless communications products and services. Despite its size, Qualcomm isn't immune to macroeconomic strain, with first-quarter revenue falling 12% and earnings before taxes dropping 39% year-over-year.
- Deere & Co.: The company is a global leader in the production of equipment related to farming as well as construction, forestry, earthmoving and lawn/turf care. It also has a large suite of digital products that provide accessibility and monitoring for customers’ machines. Strong demand, leading to higher shipments and realized prices, propelled Deere to deliver year-over-year net sales that were up by 34% and earnings per share (EPS) that surged 124% for the fiscal first quarter. Deere forecast that its 2023 net income would be in the $8.75 billion to $9.25 billion range, rising from $7.1 billion in 2022.
Fastest-Growing Robotics Stocks
These are the top robotics stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year percentage revenue growth and most recent quarterly year-over-year (EPS) growth.
Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.
|Fastest-Growing Robotics Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|Deere & Co. (DE)||386.7||114.6||124||32|
|ServiceNow Inc. (NOW)||473.31||96||469||20|
|Aptiv PLC (APTV)||105.29||28.5||1333||12|
- Deere: See description above.
- ServiceNow Inc.: ServiceNow is a cloud solutions provider whose platform helps businesses manage their workflows. Despite macroeconomic headwinds, ServiceNow ended the first quarter of 2023 with $2 billion in subscription revenue, up 24% year-over-year, and posted 20% growth in customers over the year-ago quarter. Furthermore, ServiceNow forecast 2023 revenue would rise 23% above last year’s.
- Aptiv PLC: Aptiv designs and produces auto parts—with 131 manufacturing facilities and a presence in 48 countries—focusing on connectivity, safety, and environmental sustainability in its vehicle components. Even with supply-chain disruptions and macroeconomic uncertainty, the company increased revenue 12% year-over-year in 2022 while adjusted operating margins increased to 9.1% from 8.8%. Growth is expected to continue in 2023, with the company estimating $18.7 billion to $19.3 billion in revenue—an increase of 7% to 10%.
Robotics Stocks With the Most Momentum
These are the robotics stocks that had the highest total return over the past 12 months.
|Robotics Stocks With the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Samsara Inc (IOT)||22.16||11.6||70|
|National Instruments Corp (NATI)||58.06||7.6||50|
|Cadence Design Systems Inc (CDNS)||213||5.8||40|
|ROBO Global Robotics and Automation ETF (ROBO)||N/A||N/A||5|
- Samsara Inc.: A U.S. internet-of-things (IOT) company, Samsara’s platform allows customers to manage their vehicle fleets, monitor equipment, and site visibility and workflows. Samara wrapped up its fiscal 2023 with $795 million in annual recurring revenue, up 42% year-over-year, and an operating loss that narrowed to $260 million from an operating loss of $354 million in fiscal year 2022.
- National Instruments Corp.: National Instruments is a U.S. company that manufactures automated testing equipment and virtual instrumentation software. As reported April 12, Emerson Electric agreed to buy National Instruments for $8.2 billion in a $60-per-share all-cash offer that represents a premium of nearly 50% to National Instruments' closing price on Jan. 12, the day before National Instruments announced a strategic review. First-quarter 2023 revenue for National Instruments increased 13% year-over-year and the company said it continued to clear out its delinquent product backlog as supply-chain pressures eased.
- Cadence Design Systems Inc.: Cadence Design Systems produces software, hardware, and silicone structures used in electronic systems design. In its first-quarter 2023 earnings report, Cadence forecast revenue of about $4 billion for this fiscal year, up 12% from $3.5 billion for fiscal 2022, and 2023 operating margins of an estimated 30%, similar to last year's result.
Key Trends in Robotics
With wage pressures squeezing corporate margins, companies across an array of sectors are increasing their bets on automation such as robotics to drive future profit. A survey from global consulting firm McKinsey & Co. shows that logistics and fulfillment players, as a percentage of their total capital outlays, are going to be the biggest spenders on automation in the next five years, followed by companies in the automotive, life sciences, and health care sectors, along with food and beverage. This expansion is likely to lead to increased stock investment opportunities as more companies launch or begin supplying robotic equipment.
The processes most likely to be automated are those used in logistics and warehousing such as palletization and packaging, material handling, goods receiving, and sorting. Jobs that require high levels of human input, such as welding and soldering, are the least likely to be automated. Regardless, the future appears to be machine-driven, and most companies are anticipating the adoption of robotics to improve safety, quality, and speed of production. Companies that can provide such systems stand to benefit.
Risks in Robotics Stocks
There are at least two risks to consider before investing in robotics stocks: competition and company valuations. Market sectors like this one that are poised for growth offer investment potential but tend to experience higher rates of competition. And competition can be deadly—especially for new startups that lack the capital and resources of better-established companies.
The other major risk factor associated with robotics stocks is high company valuations. The robotics industry is on an upward trajectory, and the market has responded to that. Like many other technology stocks, robotics stocks can get expensive, a result of the higher valuations associated with the companies.
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