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Netgear (NTGR)
NASDAQ:NTGR
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Netgear
(NASDAQ:NTGR)
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Rating:49Neutral
Price Target:
$25.00
▲(10.23% Upside)
Netgear's overall stock score reflects a challenging financial and technical landscape, with significant concerns in profitability, cash flow, and valuation. The positive earnings call provides some optimism, highlighting strategic growth initiatives and operational improvements. However, bearish technical indicators and valuation concerns weigh heavily on the overall score.
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 (NTGR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$635.65M
Dividend YieldN/A
Average Volume (3M)364.77K
Price to Earnings (P/E)―
Beta (1Y)1.75
Revenue Growth2.95%
EPS Growth-228.28%
CountryUS
Employees636
SectorTechnology
Sector Strength88
IndustryCommunication Equipment
Share Statistics
EPS (TTM)0.12
Shares Outstanding28,402,756
10 Day Avg. Volume309,710
30 Day Avg. Volume364,775
Financial Highlights & Ratios
PEG Ratio-0.58
Price to Book (P/B)1.49
Price to Sales (P/S)1.20
P/FCF Ratio5.17
Enterprise Value/Market Cap0.88
Enterprise Value/Revenue0.80
Enterprise Value/Gross Profit2.21
Enterprise Value/Ebitda-22.62
Forecast
1Y Price Target
$40.00Price Target Upside76.37% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)0.25
Revenue Forecast (FY)$713.45M
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 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 Earnings Call Summary
Earnings Call Date:Oct 29, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 11, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted NETGEAR's consistent performance in exceeding financial guidance, significant growth in the Enterprise segment, and strategic initiatives to drive future growth. However, challenges such as supply chain constraints, competitive pressures in home networking, and rising memory costs indicate areas of concern.Q3-2025 Updates
Positive Updates
Consistent Revenue and Margin Exceedance
NETGEAR exceeded revenue and non-GAAP operating margin guidance for the sixth consecutive quarter, showing strong operational execution and strategic direction.
Enterprise Segment Growth
The Enterprise segment grew by 16% year-over-year, driven by ProAV managed switches, and achieved a record high gross margin of over 50%.
Improvement in Gross Margin
Achieved a record non-GAAP gross margin of 39.6%, surpassing the previous quarter's record by 180 basis points.
Share Repurchase and Strong Cash Position
Repurchased $20 million of common stock, ending the quarter with $326.4 million in cash and short-term investments.
Growth in Annual Recurring Revenue
Annual recurring revenue reached $37.9 million, growing 17.2% year-over-year, with an increase in recurring subscribers to 560,000.
Strategic Transformation and New Product Launches
Launched a new website and rebranded the commercial business to NETGEAR Enterprise, with a focus on integrating mobile products into app and subscription services.
Negative Updates
Supply Chain Constraints
Supply constraints in managed switches impacted the ability to fully capitalize on growing demand, with expectations of improvement only in Q1 2026.
Home Networking Revenue Decline
Home networking revenue was down 6.6% year-over-year despite sequential growth, highlighting a competitive retail market.
Mobile Segment Revenue Drop
Mobile segment revenue decreased by 20.7% year-over-year, although there was a small sequential increase.
DDR4 Memory Cost Increase
Expected headwinds in gross margin due to rising DDR4 memory costs affecting all three business segments.
Company Guidance
During the third quarter of 2025, NETGEAR reported strong financial results, surpassing their revenue and non-GAAP operating margin guidance for the sixth consecutive quarter. Revenue grew to $184.6 million, marking an 8.2% sequential increase and a 0.9% year-over-year increase. The Enterprise segment led this growth with a 15.7% year-over-year increase, driven by a 16% sequential rise in managed switch revenue. NETGEAR achieved a record non-GAAP gross margin of 39.6% and a non-GAAP EPS of $0.12, enabled by operational improvements and a favorable product mix. Despite challenges with DDR4 memory costs, all three business segments delivered positive contribution margins. The company also repurchased $20 million worth of shares, reflecting a strong capital allocation strategy. Looking forward, NETGEAR anticipates continued growth, underpinned by strategic investments in software development and the launch of innovative products aimed at enhancing their enterprise and consumer offerings.Netgear Financial Statement Overview
Summary
Netgear's financial performance is mixed, with strong balance sheet stability but significant challenges in profitability and cash flow. The income statement shows a declining net profit margin and negative EBIT and EBITDA margins, while cash flow analysis reveals volatility and negative free cash flow growth. Despite these challenges, recent revenue growth is a positive sign.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.45
Neutral
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.60
Neutral
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.40
Negative
| 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
Negative
22.68
Price Trends
25.69
Negative
28.22
Negative
27.46
Negative
Market Momentum
-0.79
Positive
28.43
Positive
10.68
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 22.68 is below the 20-day moving average (MA) of 24.02, below the 50-day MA of 25.69, and below the 200-day MA of 27.46, indicating a bearish trend. The MACD of -0.79 indicates Positive momentum. The RSI at 28.43 is Positive, neither overbought nor oversold. The STOCH value of 10.68 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $1.12B | 24.12 | 11.38% | ― | 1.93% | -43.22% | |
68 Neutral | $1.61B | 39.86 | 6.71% | ― | 1.46% | 78.77% | |
66 Neutral | $278.19M | 21.17 | 5.24% | ― | 10.89% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
59 Neutral | $2.15B | 253.39 | 17.08% | ― | 14.31% | ― | |
50 Neutral | $701.82M | -8.37 | -48.44% | ― | 14.33% | 83.32% | |
49 Neutral | $635.65M | -24.94 | -4.94% | ― | 2.95% | -228.28% |
* Technology Sector Average
NTGR
Netgear
22.68
-3.96
-14.86%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.