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Netgear (NTGR)
NASDAQ:NTGR
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Netgear
(NASDAQ:NTGR)
52Neutral
Netgear (NTGR) vs. S&P 500 (SPY)
Market Cap
$645.58M
Dividend YieldN/A
Average Volume (3M)373.49K
Price to Earnings (P/E)57.7
Beta (1Y)1.20
Revenue Growth-8.65%
EPS GrowthN/A
CountryUS
Employees655
SectorTechnology
Sector Strength45
IndustryCommunication Equipment
Share Statistics
EPS (TTM)0.39
Shares Outstanding28,781,770
10 Day Avg. Volume404,283
30 Day Avg. Volume373,491
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.01
Price to Cash Flow (P/CF)7.90
P/FCF Ratio5.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$29.00Price Target Upside29.29% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Netgear Business Overview & Revenue Model
Company DescriptionNETGEAR, Inc. designs, develops, and markets networking and Internet connected products for consumers, businesses, and service providers. The company operates in two segments, Connected Home, and Small and Medium Business. It offers smart home/connected home/broadband access products, such as Wi-Fi routers and home Wi-Fi systems, broadband modems, Wi-Fi gateways, Wi-Fi hotspots, Wi-Fi range extenders, Powerline adapters and bridges, Wi-Fi network adapters, and digital canvasses; and value-added service offerings, including technical support, parental controls, and cybersecurity protection. The company also provides Ethernet switches, Wi-Fi mesh systems and access points, local and remote unified storage products, and Internet security appliances for small and medium-sized businesses, as well as education, hospitality and health markets. It markets and sells its products through traditional retailers, online retailers, wholesale distributors, direct market resellers, value-added resellers, and broadband service providers, as well as through its direct online store at www.netgear.com. in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company was incorporated in 1996 and is headquartered in San Jose, California.
How the Company Makes MoneyNetgear generates revenue through the sale of its networking products across its two main segments: Connected Home and SMB. In the Connected Home segment, revenue is primarily driven by sales of Wi-Fi routers, mesh Wi-Fi systems, and smart home devices that cater to consumers looking to enhance their home network performance. The SMB segment contributes to revenue through the sale of network switches, access points, and network management solutions tailored for small to medium-sized businesses. The company leverages a distribution network that includes retailers, online marketplaces, and value-added resellers to reach its customers. Additionally, Netgear partners with internet service providers to offer its products as part of service bundles, further expanding its market reach and revenue potential.
Netgear Financial Statement Overview
Summary
Netgear faces challenges in revenue and profit growth, with declining revenue and inconsistent net margins. However, a strong balance sheet with low leverage and positive cash flow trends indicates potential financial stability. Continued focus on profitability and revenue growth is needed.Income Statement
Netgear's revenue has declined from 2020 to 2024, with the most recent annual revenue showing a decrease. Gross profit margin decreased from 2019 to 2024, indicating declining efficiency in managing production costs. The net profit margin improved in 2024 compared to 2023, moving from negative to positive, yet remains lower than earlier years, indicating challenges in maintaining profitability.55
Neutral
Balance Sheet
Netgear's balance sheet shows a stable equity base with a healthy equity ratio. The debt-to-equity ratio has improved over the years, reflecting better financial leverage management. However, the return on equity has been inconsistent, indicating fluctuating profitability relative to shareholder equity.70
Positive
Cash Flow
The company has shown positive free cash flow growth in 2024, indicating improved cash generation from operations despite previous years of negative cash flows. The operating cash flow to net income ratio is strong, suggesting efficient conversion of income to cash.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 673.76M | 740.84M | 932.47M | 1.17B | 1.26B | Gross Profit |
| 195.93M | 249.25M | 250.55M | 365.84M | 372.15M | EBIT |
| 12.22M | -33.27M | 5.96M | 66.60M | 56.61M | EBITDA |
| -65.80M | -25.04M | -23.82M | 80.50M | 94.47M | Net Income Common Stockholders |
| 12.36M | -104.77M | -68.99M | 49.39M | 58.29M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 408.69M | 283.65M | 227.43M | 271.52M | 353.32M | Total Assets |
| 850.23M | 847.14M | 1.02B | 1.08B | 1.11B | Total Debt |
| 19.80M | 41.57M | 45.10M | 18.57M | 25.51M | Net Debt |
| -266.65M | -135.15M | -101.40M | -245.20M | -320.95M | Total Liabilities |
| 309.16M | 311.65M | 398.93M | 381.72M | 416.65M | Stockholders Equity |
| 541.07M | 535.50M | 620.86M | 696.82M | 689.38M |
| Cash Flow | Free Cash Flow | |||
| 155.80M | 51.05M | -19.49M | -14.44M | 170.85M | Operating Cash Flow |
| 164.80M | 56.85M | -13.73M | -4.58M | 181.15M | Investing Cash Flow |
| -26.16M | -27.43M | -79.52M | -9.98M | -16.84M | Financing Cash Flow |
| -28.91M | 797.00K | -24.02M | -68.12M | -8.06M |
Netgear Technical Analysis
Positive
22.43
Price Trends
24.18
Negative
25.55
Negative
22.22
Positive
Market Momentum
-0.61
Negative
46.72
Neutral
53.44
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTGR, the sentiment is Positive. The current price of 22.43 is below the 20-day moving average (MA) of 22.56, below the 50-day MA of 24.18, and above the 200-day MA of 22.22, indicating a neutral trend. The MACD of -0.61 indicates Negative momentum. The RSI at 46.72 is Neutral, neither overbought nor oversold. The STOCH value of 53.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NTGR.
Netgear Risk Analysis
Netgear disclosed 39 risk factors in its most recent earnings report. Netgear reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Netgear Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $18.92B | 42.54 | 323.87% | 0.80% | 14.59% | 19.51% | |
60 Neutral | $2.12B | 58.72 | -0.78% | ― | 21.80% | 89.21% | |
59 Neutral | $10.59B | 10.09 | -6.37% | 3.05% | 7.44% | -10.67% | |
52 Neutral | $645.58M | 57.73 | 2.30% | ― | -8.65% | ― | |
42 Neutral | $6.11B | ― | -0.60% | ― | -6.99% | 91.98% | |
40 Underperform | $597.32M | ― | -123.20% | ― | -19.70% | -70.40% |
* Technology Sector Average
Performance Comparison
NTGR
Netgear
22.43
7.61
51.35%
ADTN
Adtran
7.71
3.14
68.71%
SATS
Echostar
22.51
6.49
40.51%
UI
Ubiquiti Networks
312.85
206.19
193.32%
PI
IMPINJ
89.75
-65.80
-42.30%
FKWL
Franklin Wireless
4.82
1.83
61.20%
Netgear Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: -20.32% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant progress in NETGEAR's strategic focus and cash position, with strong growth in recurring revenue and the Pro AV segment. However, there were challenges such as revenue decline, supply constraints, and operating losses. The company is optimistic about 2025 with restructuring and investment plans.Highlights
Strong Cash Position and Share Repurchase
NETGEAR ended 2024 with $409 million in cash and equivalents, up $125 million from the prior year. The company also repurchased over $33 million in stock.
Recurring Revenue Growth
NETGEAR's recurring revenue grew 25% year-over-year, ending 2024 with almost $35 million in annual recurring revenue.
Pro AV Segment Success
NETGEAR's Pro AV business experienced another record quarter of end-user sales, adding almost 50 new manufacturing partners, totaling over 370.
Settlement with TP-Link
NETGEAR settled a patent dispute with TP-Link, adding more than $100 million in cash to the balance sheet.
NFB Segment Growth
The NFB segment grew to $80.8 million in revenue for Q4, up 14.9% year-over-year.
Inventory Management Improvements
NETGEAR reduced finished goods inventory by $86 million or 35% from the previous year, achieving its objective of three months of supply.
Lowlights
Overall Revenue Decline
Quarterly revenue was $182.4 million, down 3.3% year-over-year.
Supply Constraints in Pro AV
Short-term supply constraints for Pro AV managed switch products are expected to impact Q1 2025, leading to muted top-line guidance for NFB.
Consumer Networking Market Contraction
The U.S. consumer networking market contracted in Q4, with CHP business revenue down 14.2% year-over-year.
Operating Losses
NETGEAR reported a non-GAAP operating loss of $49.6 million for the full year 2024, with a non-GAAP operating margin of negative 7.4%.
Company Guidance
During the conference call, NETGEAR provided guidance for the first quarter of 2025, highlighting expected net revenue in the range of $145 million to $160 million. The company anticipates maintaining a similar gross margin to the 32.8% reported in Q4 2024. However, due to seasonally lower revenue, the GAAP operating margin is expected to range from negative 16.4% to negative 13.4%, and the non-GAAP operating margin is projected to be between negative 10% and negative 7%. The guidance reflects challenges such as supply constraints for certain Pro AV managed switch products, which are expected to limit top-line growth potential. Despite these constraints, NETGEAR remains focused on long-term growth and profitability by investing in B2B go-to-market capabilities, software innovation, and a diversified product portfolio. The company also plans to continue its balanced capital allocation strategy, including share repurchases and potential acquisitions, while maintaining a strong cash position.Netgear Corporate Events
Executive/Board Changes
Netgear Announces Departure of President David J. Henry
Neutral
Jan 7, 2025
Netgear has announced the separation of David J. Henry, the President and General Manager of Connected Home Products and Services, effective December 31, 2024. As part of his severance package, Mr. Henry will receive a lump sum equivalent to twelve months of his base salary, reimbursement for twelve months of COBRA premiums, and accelerated vesting of unvested stock units, along with potential eligibility for a bonus for the second half of 2024. These terms are in line with a previously disclosed severance agreement and reflect the company’s acknowledgment of his contributions.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.