iRobot stock extends gains even as market sours

r a second straight day, iRobot (NASDAQ:IRBT) powered higher, this time despite a strong market headwind, closing above $20. The stock has now retraced its steps of the past several weeks and is poised for a breakout of its trading range on coming news including the new Roomba, three new home robots, expected military contracts and improved investor sentiment.

As I've been searching for reasons for this turnaround trend, I checked out some recent analyst reports that are all in the right direction. An Aug. 1 Argus report (Free to Fidelity customers) features an extensive and topical discussion of iRobot, reiterates a Buy rating, lifts earnings estimates for this year and next and sets a $27 price target. Thompson Gradient Aug. 3 raised its rating from sell to hold, and Price Target Research raised its rating July 27 from Strong Negative to Negative (at least in the right direction!)

I also note yesterday's massive $51 million order for Foster-Miller Talon Robots, even though I have no knowledge of whether iRobot might receive a similar order. It's unclear. Note that Foster-Miller announced it's contract potential had increased from $63.9 million to $150 million in May, but iRobot's Indefinite Delivery Indefinite Quantity contract with the same NAVAIR office has been stuck at $64 million. The two company's contracts have frequently mirrored each other but I've made a point of noting that Foster-Miller appears to have been pulling ahead for much of this past year. That could change dramatically, or course, once the SUGV (also known as the X300) and the iRobot Warrior (also known as the X700) are ready for volume orders in 2008.