iRobot (IRBT) stock surged 21% on Friday and was up 9% in pre-market trading Monday, fueled by Trump administration support for the domestic robot industry. Shares have since dipped about 5% in early trading today, with nearly 40% sold short, hinting at a potential short squeeze.

iRobot, headquartered in Bedford, Massachusetts, creates household robots like Roomba and Braava that perform various cleaning tasks. Despite a market capitalization of $117 million, the stock plummeted 55% this year due to tariffs. Revenue was $145.8 million in the third quarter, down from $193.4 million last year.

The falling stock price has lowered iRobot’s P/E ratio to less than 4, from over 40 in 2023. While facing revenue declines and an operating loss of $17.7 million, the company surpassed analysts’ expectations in Q3. CEO Gary Cohen cited market obstacles and production delays as factors affecting revenue negatively.

Management reported $24.8 million in cash, down from $40.6 million. U.S. revenue dropped by 33%, with declines of 9% in Japan and 13% in Europe, the Middle East, and Africa. The Trump administration’s support for the domestic robotics industry could boost U.S. sales, potentially through subsidies and tax incentives.

iRobot, though not heavily covered by analysts, has one hold rating with a $11 price target, almost 200% higher than the current stock price. Despite potential sector interest from the White House, caution is advised due to meme stock investor influence and the risk of short squeezes.

Read more at Yahoo Finance: Is a Short Squeeze Brewing in iRobot Stock?