NETGEAR (NASDAQ:NTGR – Get Free Report) released its quarterly earnings results on Wednesday. The communications equipment provider reported $0.13 earnings per share for the quarter, beating analysts’ consensus estimates of ($0.05) by $0.18, FiscalAI reports. NETGEAR had a negative return on equity of 3.33% and a negative net margin of 4.91%. The firm had revenue of $167.35 million during the quarter, compared to analysts’ expectations of $170.00 million. During the same period last year, the firm posted $0.12 EPS. The business’s revenue was down 9.3% on a year-over-year basis.
Here are the key takeaways from NETGEAR’s conference call:
- Underlying enterprise demand remains strong: Enterprise end-customer sell-through grew about 6% year over year, led by double-digit growth in managed switches, while its backlog climbed to more than 2.5 times the prior quarter’s level. Enterprise gross margin rose to 53.2%, and software momentum included a doubling of Insight billings year over year.
- Manufacturing execution is limiting sales: A partner’s poorly executed factory transition constrained product output despite available components, holding enterprise revenue roughly flat year over year and also affecting consumer routers. NETGEAR expects constraints to continue into Q1 2027; some consumer demand was perishable and could be lost.
- NETGEAR reported Q3 revenue of $167.3 million and non-GAAP operating income of $3.3 million, its fifth consecutive profitable quarter and above its guidance range. The company attributed the result to favorable gross margins and expense discipline, with enterprise generating about 70% of non-GAAP gross profit.
- Near-term profitability faces pressure: Q4 revenue is forecast at $160 million to $175 million, with consolidated gross margin expected to decline about 150 basis points sequentially, primarily from higher memory and transportation costs. Consumer revenue fell 18.2% year over year in Q3, and management expects elevated component costs to continue weighing on that business.
NETGEAR Price Performance
Shares of NETGEAR stock opened at $19.03 on Friday. The firm has a market cap of $517.22 million, a P/E ratio of -15.73 and a beta of 1.22. The firm has a 50 day simple moving average of $22.22 and a 200 day simple moving average of $22.93. NETGEAR has a fifty-two week low of $18.69 and a fifty-two week high of $30.46.
Wall Street Analysts Forecast Growth
Several analysts have recently commented on NTGR shares. Wall Street Zen upgraded NETGEAR from a “sell” rating to a “hold” rating in a report on Sunday, September 6th. Weiss Ratings reaffirmed a “sell (d)” rating on shares of NETGEAR in a report on Monday, September 21st. Finally, Stifel Nicolaus cut their price target on NETGEAR from $36.00 to $30.00 and set a “buy” rating for the company in a report on Monday, October 5th. One research analyst has rated the stock with a Buy rating, one has issued a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat.com, NETGEAR has an average rating of “Hold” and an average target price of $30.00.
Read Our Latest Stock Analysis on NTGR
Trending Headlines about NETGEAR
Here are the key news stories impacting NETGEAR this week:
- Positive Sentiment: NETGEAR reported third-quarter earnings of $0.13 per share, above analysts’ expectation of a $0.05-per-share loss and slightly ahead of the $0.12 earned a year earlier. NETGEAR Surpasses Q3 Earnings Estimates
- Negative Sentiment: Revenue was $167.35 million, missing the $170 million consensus estimate and falling 9.3% year over year. The company also reported a negative net margin, underscoring ongoing profitability pressures. NETGEAR Q3 Earnings Results
- Negative Sentiment: Fourth-quarter guidance calls for revenue of $160 million to $175 million and a non-GAAP operating margin of just 0% to 3%. The limited margin outlook and revenue range may be weighing more heavily on sentiment than the earnings beat. NETGEAR Q4 Outlook
NETGEAR Company Profile
NETGEAR, Inc develops and sells networking products and connected technology for consumers, small and medium-sized businesses, and service providers. Its portfolio includes wireless routers, mesh Wi-Fi systems, cable and 5G modems, Wi-Fi extenders, network switches, wireless access points, and related connectivity products.
The company markets consumer products under brands such as Nighthawk and Orbi, while its business-oriented offerings include managed networking, switching, wireless access points, and cloud-based network management through the NETGEAR Insight platform.
Read More
- Five stocks we like better than NETGEAR
- Google’s Credit Backstop May Be TeraWulf’s Biggest Advantage
- Could the Midterms Revive Medicare for All? 3 Healthcare Stocks to Watch
- Qualcomm Beat Earnings, But Its Fastest-Growing Businesses Have a Catch
- Oil, Uranium, or Renewables? 3 Energy Plays for a Changing Market
Receive News & Ratings for NETGEAR Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for NETGEAR and related companies with MarketBeat.com's FREE daily email newsletter.
