Simple Concepts Research Group

Cheap Tech Stock to Watch: NETGEAR (NTGR)

by | Sep 30, 2021 | Stock Picks

NETGEAR (NTGR) Company Overview & Stock Price Forecast

This article provides a brief analysis and stock rating for NETGEAR (NTGR) including an updated stock price target. Additional data on the company’s earnings yield, price/earnings ratio, return on invested capital and YTD performance are discussed as well.

NetGear Fundamentals

NETGEAR Stock Rating

Stock Price Target: $43.81

In the section below, we discuss the earnings yield, P/E, return on invested capital and YTD performance for NETGEAR in comparison to the Telecom Equipment industry and the S&P 500.

Earnings Yield

NetGearTelecom EquipmentS&P 500T-Bill (10Y)

The current earnings yield for NETGEAR is 10.55%, in comparison to 2.94% for the S&P 500 and 1.51% for the 10-year treasury bond. The median earnings yield for the Telecom Equipment industry is 6.89%.

Price/Earnings Ratio

NetGearTelecom EquipmentS&P 500

NETGEAR is currently trading at a P/E of 10.50. The P/E for the Telecom Equipment industry is 31.80 and the P/E for the S&P 500 is 34.01.

Return on Invested Capital (ROIC)

NetGearTelecom EquipmentS&P 500

NETGEAR’s ROIC is currently 14.11% in comparison to 21.80% for the Telecom Equipment industry and 8.6% for the S&P 500.

YTD Performance

NetGearTelecom EquipmentS&P 500

The YTD performance for NETGEAR is -19.12%. The Telecom Equipment industry has a YTD performance of 25.01% in comparison to the YTD S&P 500 performance of 16.06%.

News & Financial Reporting

  • Q2 2021 Revenue of $308.8M (10.3% topline growth YoY)
  • Operating income of $21.5 million (7.0% of net revenue), compared to $8.9 million in Q2 2020
  • US consumer WiFi market share of 46% (added 33K subscribers in Q2 with end EOY goal of 650K)

Stock Price Target: $43.81

Company Overview

NETGEAR Stock Rating

NETGEAR designs and markets networking and Internet connected products for consumers, businesses, and service providers in the US and internationally. The company operates through two segments: Connected Home and Small / Medium Business.

NETGEAR offers broadband modems, WiFi hotspots, routers and access points. It also provides Ethernet switches, access points, storage products and internet security products for small and mid-size businesses (in addition to technical support, parental controls, and cybersecurity protection for products).

The company markets and sells its products through online retailers, wholesale distributors, direct market resellers and broadband service providers. The company was founded in 1996 and is headquartered in San Jose, California. The current CEO is Patrick Lo.

Additional Financials

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This material is provided for informational purposes only and is not financial advice. The information contained herein should not solely be used for the formation of an investment decision, whether you are a long term or short term investor.