The robotics industry is set for a meteoric rise, reshaping industries from manufacturing to healthcare, logistics, agriculture, and even entertainment. These cutting-edge machines, designed to mimic human actions or perform specialized tasks with precision, are becoming indispensable across sectors.
With these high-tech marvels already playing a pivotal role in global operations, the market is gearing up for a massive boom. Projections indicate that the global robotics market will hit $46.1 billion by the end of this year, with the U.S. poised to take the largest slice, generating $9.4 billion in 2024 alone. Plus, this market is on track to achieve a whopping $73 billion by 2029, demonstrating a steady compound annual growth rate (CAGR) of 9.6% spanning 2024 to 2029.
In fact, robotics companies are attracting a wave of investments, with $1.3 billion pouring in through 47 deals just in July alone. This surge in funding highlights the industry's explosive growth and the lucrative opportunities it holds for investors. Keeping all these factors in mind, here are three “Strong Buy”-rated robotics stocks positioned to skyrocket, with an upside potential of 98% or even more, according to Wall Street analysts.
Robotics Stock #1: Serve Robotics
California-based Serve Robotics Inc. (SERV) is revolutionizing delivery with its advanced, artificial intelligence (AI)-driven, low-emissions sidewalk robots designed for sustainability and cost-efficiency. Emerging as an independent company from Uber (UBER) in 2021, Serve has already executed tens of thousands of deliveries for major partners like Uber Eats and 7-Eleven.
Moreover, the company is scaling up with multi-year contracts, including a notable deal to deploy up to 2,000 delivery robots on the Uber Eats platform across various U.S. markets.
Valued at a market cap of $316.7 million, SERV came under the spotlight in July, when AI king Nvidia (NVDA) disclosed a 10% stake. The stock has rallied a stellar 301.7% over the past three months, far outpacing the broader S&P 500 Index’s ($SPX) 4.2% return during the same time frame.
Following the company’s impressive Q2 earnings results, shares of Serve closed up more than 9% on Aug 14. During the quarter, the company boosted its top line by a whopping 655% year over year to approximately $468,400, driven by strong performance in its software and delivery segments.
SERV is unprofitable, but trimmed its quarterly loss to $0.27 per share from its year-ago loss per share of $0.74. In Q2, Serve ramped up its daily supply hours to 385, reflecting a remarkable 106% increase from the previous year and a 28% sequential boost.
The company also achieved an 85% year-over-year surge in daily active robots and a 23% quarter-over-quarter rise, underscoring its impressive operational growth. As of June 30, SERV had a solid $28.8 million in cash and cash equivalents, providing a strong financial safety net.
In its Q2 earnings release, management highlighted plans to deploy at least 250 additional robots in Los Angeles by Q1 of fiscal 2025, and aims to fully deploy 2,000 robots under its Uber Eats agreement by the end of fiscal 2025, potentially generating $60 million to $80 million in annual run-rate revenue.
SERV stock has only one analyst in coverage on Wall Street, with a rating of “Strong Buy.” The firm’s price target of $16 indicates a massive potential upside of 115.6% from the current price levels.
Robotics Stock #2: Arbe Robotics
Israel-based Arbe Robotics Ltd. (ARBE) is revolutionizing the radar landscape with its cutting-edge Perception Radar solutions. The company claims that its radar technology offers 100 times more detail than any other radar available on the market, setting new standards for driver-assist systems and paving the way for fully autonomous driving.
ARBE’s radar technology is essential for L2+ and higher autonomy levels. Serving automakers, Tier 1 suppliers, and various safety applications, Arbe is redefining advanced sensing. Valued at $148.4 million by market cap, shares of Arbe are down 13.8% on a YTD basis.
Arbe reported its Q2 earnings results on Aug. 6, which crushed Wall Street’s projections on both the top and bottom lines. The company’s revenue of $409,000 was up 41.5% annually, while its adjusted net loss of $0.09 per share marked a solid improvement from the year-ago quarter’s adjusted loss per share of $0.13. By comparison, Wall Street had forecast $300,000 in revenue and an $0.11 loss per share.
During the quarter, the company reached a significant milestone by securing the selection of its imaging radar by a top OEM and a major European truck manufacturer, underscoring its market appeal and technological validation.
Furthermore, the company’s balance sheet appears strong. As of June 30, Arbe's financial position includes $8.8 million in cash and cash equivalents and $17.7 million in short-term bank deposits.
“Arbe is well-positioned to capitalize on the growing demand for advanced radar systems, and we anticipate an increase in sales and market share in the near future," said CEO Kobi Marenko.
Looking forward to fiscal 2024, the company expects revenue to remain steady compared to fiscal 2023 levels, with growth projected for fiscal 2025 as production ramps up in the latter half of the year.
By concentrating solely on chipset production, the company is committed to maintaining a solid balance sheet and ensuring cost-effectiveness to support its revenue growth. That said, despite ongoing operational losses and negative cash flow, Arbe's current and anticipated funding, combined with management's strategic plans and revenue forecasts, ensure sufficient capital to support its operations in the near term.
ARBE stock has a unanimous “Strong Buy” rating from the three analysts in coverage.
The average analyst price target of $3.75 indicates a potential upside of 98.4% from current price levels.
Robotics Stock #3: Lifeward
Founded in 2001, Israel-based Lifeward Ltd. (LFWD), formerly known as ReWalk Robotics, is at the forefront of transforming physical rehabilitation and recovery with innovative solutions that enhance care from clinical settings to home and community. Driven by a mission to revolutionize the lives of those with physical limitations or disabilities, Lifeward delivers cutting-edge products like the ReWalk Exoskeleton, AlterG Anti-Gravity systems, ReStore Exo-Suit, and MyoCycle FES Systems.
With a market cap of around $27.4 million, shares of Lifeward have pulled back about 42% on a YTD basis.
On Aug. 15, shares of Lifeward shot up more than 30% after the company reported stronger-than-expected Q2 earnings. The company’s revenue of $6.7 million reflected a massive 400% year-over-year jump, narrowly edging past Wall Street’s consensus estimate. Lifeward reported a loss per share of $0.50 in Q2, slightly better than Wall Street’s forecast for a loss per share of $0.53.
Top-line growth was fueled by ReWalk system revenue, primarily driven by the expansion of access through Medicare coverage, marking a significant milestone for the company. CEO Larry Jasinski highlighted the company's progress in establishing a Medicare processing pipeline and achieving successful payments.
As of June 30, the company maintained a healthy $15.1 million unrestricted cash and cash equivalents with zero debt on the books. Delays in Medicare payments impacted operational cash outflows of $5.6 million in Q2, but with $2.6 million in receivables for Medicare claims now starting to come through, the company is poised for improved cash flow in the upcoming quarters.
Encouraged by the strong Q2 performance, management reaffirmed its fiscal 2024 revenue outlook, projecting it to range between $28 million and $32 million. With expanded access to ReWalk systems thanks to newly established Medicare coverage and increasing sales momentum from its revamped commercial team, management anticipates steady quarterly revenue growth for the remainder of fiscal 2024.
LFWD stock has a unanimous “Strong Buy” rating from just two analysts offering recommendations, with the price target of $13 indicating expected upside potential of about 315%.
On the date of publication, Anushka Mukherji did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
