Why iRobot Stock Is Crashing Today

iRobot (NASDAQ: IRBT) stock has fallen 35% after the company issued a "going concern" warning, raising doubts about its ability to stay in business over the next year.

What happened?

The company behind the popular Roomba vacuums revealed severe financial instability, highlighting declining revenue and mounting losses. iRobot has now withdrawn its 2025 financial guidance and canceled its scheduled earnings call, a move that often signals worsening conditions.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

The company's net loss widened to $77.1 million in its latest quarter, up from a $63.6 million loss in the same period a year earlier. The company also disclosed a 44% drop in revenue in its latest quarter, with total sales sinking to $172 million. Adding to these concerns, sales fell sharply in every major market:

• U.S.: Down 47%
• Japan: Down 34%
• EMEA (Europe, Middle East, and Africa): Down 44%

CEO Colin Angle acknowledged the challenges, stating, "We recognize the significant financial headwinds ahead, and we are evaluating all strategic alternatives to ensure the company's survival."

A business model under pressure

iRobot is struggling to keep up with rising competition, especially from lower-cost Chinese robotic vacuum manufacturers. These rivals offer similar or better features at reduced prices, eroding iRobot's once-dominant position.

Meanwhile, iRobot's costly restructuring efforts -- including a 50% workforce reduction -- have yet to yield stability. The company has also been dealing with excess inventory write-offs, further damaging its margins.

In a desperate bid to regain its footing, iRobot has launched eight new Roomba models, touting lidar navigation and improved mapping technology. However, the company's financial turmoil has overshadowed this product push, leaving investors skeptical.

The fallout from the Amazon deal

A major turning point for iRobot came when Amazon scrapped its planned $1.7 billion acquisition in January 2024 after European regulators blocked the deal. The failed merger has left iRobot struggling for financial support, adding to its uncertain future.

What's next for iRobot?

With no clear path to profitability, iRobot has hired financial advisors to explore strategic alternatives, including a potential sale or refinancing. However, it remains unclear whether these efforts will be enough to restore investor confidence.

Should you invest $1,000 in iRobot right now?

Before you buy stock in iRobot, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and iRobot wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $666,539!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of March 10, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. The Motley Fool has positions in and recommends Amazon. The Motley Fool recommends iRobot. The Motley Fool has a disclosure policy.