Netgear (NTGR) AI Stock Analysis

• Market Cap: $787.89M
• Dividend Yield: N/A
• Average Volume (3M): 563.66K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.71
• Revenue Growth: 2.95%
• EPS Growth: -228.28%
• Country: US
• Employees: 636
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): 0.12
• Shares Outstanding: 28,402,756
• 10 Day Avg. Volume: 471,911
• 30 Day Avg. Volume: 563,660
• PEG Ratio: -0.58
• Price to Book (P/B): 1.49
• Price to Sales (P/S): 1.20
• P/FCF Ratio: 5.17
• Enterprise Value/Market Cap: 0.71
• Enterprise Value/Revenue: 0.80
• Enterprise Value/Gross Profit: 2.21
• Enterprise Value/Ebitda: -22.62
• 1Y Price Target: $40.00
• Price Target Upside: 44.20% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): >-0.01
• Revenue Forecast (FY): $689.54M

• Rating: 52 Neutral
• Price Target: $30.00 ▲(8.15% Upside)

Netgear's overall stock score reflects operational challenges and cash flow volatility, despite a strong balance sheet. Technical indicators provide mixed signals, and valuation concerns persist due to a negative P/E ratio. The positive earnings call highlights strategic growth, but supply chain and cost issues remain.

Positive Factors

Record Gross Margins

Achieving record gross margins enhances profitability and indicates effective cost management, supporting long-term financial health.

NFB Segment Growth

Strong growth in the NFB segment reflects successful strategic focus and positions Netgear well in a competitive market, driving future revenue.

Strong Subscriber Growth

Growing subscriber base enhances recurring revenue streams, providing stability and predictability to financial performance.

Negative Factors

Supply Constraints in ProAV

Supply constraints in ProAV could hinder revenue growth and market share capture, affecting long-term business prospects.

Cash Flow Volatility

Significant cash flow volatility poses risks to financial stability and limits the company's ability to invest in growth opportunities.

Declining Mobile Segment Revenue

Declining revenue in the mobile segment indicates challenges in maintaining market relevance, potentially impacting overall growth.

Netgear Business Overview & Revenue Model

Company Description

Netgear, Inc. is a global networking company that specializes in providing innovative networking products and services for consumers, businesses, and service providers. The company operates primarily in the networking and connectivity sectors, offering a wide range of products such as routers, switches, wireless access points, and security cameras. Netgear's core offerings cater to home users looking for reliable internet connectivity, as well as enterprises needing robust networking solutions to support their operations.

How the Company Makes Money

Netgear generates revenue through multiple key streams, primarily by selling hardware products, including routers, switches, and network storage devices. The company also earns income from subscription services related to its smart home products and security solutions, such as cloud storage and monitoring services. Additionally, Netgear partners with various telecommunications companies and internet service providers to offer bundled solutions that include its networking products. These partnerships can create significant revenue opportunities by integrating Netgear's technology into broader service offerings. The company also benefits from a growing demand for high-speed internet connectivity and the increasing trend of remote work and smart home technology adoption, which further drives sales of its products.

Netgear Financial Statement Overview

Summary

Netgear's financial performance is marked by operational challenges and cash flow volatility. Despite a strong balance sheet with low leverage, profitability and cash flow generation are concerns. Recent revenue growth is positive, but improving margins and cash flow is crucial.

Income Statement

Netgear's income statement reveals mixed performance. The TTM data shows a gross profit margin of 33.84%, which is relatively stable compared to previous years. However, the net profit margin has declined to -9.13%, indicating profitability challenges. Revenue growth has been volatile, with a recent increase of 24.5% in the TTM period, but past years have shown declines. The negative EBIT and EBITDA margins highlight operational inefficiencies.

Balance Sheet

The balance sheet shows a strong equity position with a low debt-to-equity ratio of 0.031 in the TTM period, suggesting financial stability. However, the return on equity is low at 11.86%, reflecting challenges in generating returns from equity. The equity ratio remains healthy, indicating a solid asset base supported by equity.

Cash Flow

Cash flow analysis indicates significant volatility. The TTM period shows negative free cash flow growth of -112.36%, and the operating cash flow to net income ratio is below 1, suggesting cash flow challenges. The free cash flow to net income ratio is relatively high, indicating some efficiency in converting net income to cash, but overall cash flow performance is weak.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	699.57M	673.76M	740.84M	932.47M	1.17B	1.26B
Gross Profit	251.94M	195.93M	249.25M	250.55M	365.84M	372.15M
EBITDA	-24.66M	-65.80M	-25.04M	-23.82M	80.50M	94.47M
Net Income	-26.13M	12.36M	-104.77M	-68.99M	49.39M	58.29M
Balance Sheet
Total Assets	810.81M	850.23M	847.14M	1.02B	1.08B	1.11B
Cash, Cash Equivalents and Short-Term Investments	326.38M	408.69M	283.65M	227.43M	271.52M	353.32M
Total Debt	42.99M	30.63M	41.57M	45.10M	27.79M	34.66M
Total Liabilities	303.96M	309.16M	311.65M	398.93M	381.72M	416.65M
Stockholders Equity	506.85M	541.07M	535.50M	620.86M	696.82M	689.38M
Cash Flow
Free Cash Flow	-13.54M	155.80M	51.05M	-19.49M	-14.44M	170.85M
Operating Cash Flow	3.58M	164.80M	56.85M	-13.73M	-4.58M	181.15M
Investing Cash Flow	-28.83M	-26.16M	-27.43M	-79.52M	-9.98M	-16.84M
Financing Cash Flow	-45.04M	-28.91M	797.00K	-24.02M	-68.12M	-8.06M

Netgear Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 27.74
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTGR, the sentiment is Negative. The current price of 27.74 is below the 20-day moving average (MA) of 31.22, below the 50-day MA of 31.17, and above the 200-day MA of 27.70, indicating a neutral trend. The MACD of -0.98 indicates Positive momentum. The RSI at 33.96 is Neutral, neither overbought nor oversold. The STOCH value of 15.23 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NTGR.

Netgear Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HLIT	79 Outperform	$1.19B	24.62	11.38%	―	1.93%	-43.22%
DGII	76 Outperform	$1.42B	35.51	6.71%	―	1.46%	78.77%
AVNW	72 Outperform	$283.84M	21.20	5.24%	―	10.89%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
EXTR	58 Neutral	$2.36B	277.80	17.08%	―	14.31%	―
NTGR	52 Neutral	$787.89M	―	-4.94%	―	2.95%	-228.28%
ADTN	41 Neutral	$598.47M	―	-48.44%	―	14.33%	83.32%

Netgear Corporate Events

NETGEAR’s Earnings Call: Growth Amid Challenges

During the recent earnings call, NETGEAR expressed a generally positive sentiment, highlighting its consistent performance in surpassing financial guidance and significant growth in the Enterprise segment. The company also discussed strategic initiatives aimed at driving future growth. However, challenges such as supply chain constraints, competitive pressures in the home networking sector, and rising memory costs were noted as areas of concern.

NETGEAR Reports Strong Q3 2025 Results Amid Strategic Growth

NETGEAR, Inc., a global leader in intelligent networking solutions, offers innovative technologies for businesses, homes, and service providers, focusing on connectivity and performance. In its third quarter of 2025, NETGEAR reported revenues of $184.6 million, marking a slight increase from the previous year, and achieved a record high gross margin of over 39%. The company also repurchased $20 million worth of shares, maintaining a strong cash position with over $326 million in cash and short-term investments.