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Former Pandemic Winner Spikes to Fresh 52-Week High
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Many of the ‘stay-at-home’ stocks that were big winners in 2020 have had a rough time reclaiming their former highs. Names like Peloton and Zoom come to mind. Growth for these companies soared in the pandemic era, but significantly slowed in the years that followed. As such, their stock prices haven’t enjoyed the same type of outperformance that they once did.
One stock that has started to buck the trend is Logitech (LOGI - Free Report) , a global leader in peripherals for personal computers and other digital platforms. A Zacks Rank #2 (Buy) stock, Logitech has outperformed this year and recently hit a 52-week high following upbeat fiscal second-quarter earnings results.
The Zacks Rundown
The Switzerland-based company provides wireless mice, corded and cordless keyboards, PC webcams, as well as other accessories for mobile devices. In addition, LOGI offers portable wireless Bluetooth and Wi-Fi connected speakers, PC headsets, microphones, wireless audio wearables, and home security cameras.
LOGI’s channel network includes consumer electronics distributors, retailers, mass merchandisers, specialty stores, and online merchants. The company sells its products under the Logitech, ASTRO Gaming, Streamlabs, Blue Microphones, Ultimate Ears, and Jaybird brands.
Logitech is a component of the Zacks Computer – Peripheral Equipment industry group, which ranks in the top 31% out of more than 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform the market over the next 3 to 6 months.
Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1. It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.
Earnings Trends and Future Estimates
Logitech has built up an impressive earnings history, surpassing earnings estimates in three of the last four quarters. Earlier this week, the company reported fiscal second-quarter earnings of $1.09/share, a 65.15% surprise over the $0.66/share consensus estimate. LOGI has delivered a trailing four-quarter average earnings surprise of 30.41%.
Image Source: Zacks Investment Research
Earnings estimates for Logitech have begun to stabilize, with growth picking up in the next fiscal year. Projections for fiscal 2025 show earnings growth of 30.34% to $3.86/share, with revenues expected to climb 4.05% to $4.25 billion.
Other Bullish Considerations
Growing adoption of new mobile platforms in both mature and emerging markets are fueling demand for Logitech’s peripherals and accessories. The company has been able to leverage its software and go-to-market capabilities to drive market share growth. Logitech’s cloud-based video conferencing services have been a key catalyst. In addition, Logitech’s partnerships with cloud providers like Microsoft and Google are major positives.
The acquisition of Finland’s Loupedeck earlier this year will enhance Logitech’s ability to provide customizable and contextual control experiences for its full portfolio of devices. Loupedeck offers deep native integrations with industry-leading creative software for photo editing, retouching, design and streaming.
Bottom Line
Logitech has begun to show signs of its former glory. The company is ranked favorably by our Zacks Style Scores, with a top ‘A’ mark in our Growth category. This indicates that further upside is likely based on favorable earnings and sales growth metrics.
The future looks bright for this highly-ranked, leading stock. LOGI shares have soared more than 27% this year, and momentum has picked up in October as the market attempts to regain its footing. Backed by a leading industry group and impressive history of earnings beats, it’s not difficult to see why this company is a compelling investment.
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Former Pandemic Winner Spikes to Fresh 52-Week High
Many of the ‘stay-at-home’ stocks that were big winners in 2020 have had a rough time reclaiming their former highs. Names like Peloton and Zoom come to mind. Growth for these companies soared in the pandemic era, but significantly slowed in the years that followed. As such, their stock prices haven’t enjoyed the same type of outperformance that they once did.
One stock that has started to buck the trend is Logitech (LOGI - Free Report) , a global leader in peripherals for personal computers and other digital platforms. A Zacks Rank #2 (Buy) stock, Logitech has outperformed this year and recently hit a 52-week high following upbeat fiscal second-quarter earnings results.
The Zacks Rundown
The Switzerland-based company provides wireless mice, corded and cordless keyboards, PC webcams, as well as other accessories for mobile devices. In addition, LOGI offers portable wireless Bluetooth and Wi-Fi connected speakers, PC headsets, microphones, wireless audio wearables, and home security cameras.
LOGI’s channel network includes consumer electronics distributors, retailers, mass merchandisers, specialty stores, and online merchants. The company sells its products under the Logitech, ASTRO Gaming, Streamlabs, Blue Microphones, Ultimate Ears, and Jaybird brands.
Logitech is a component of the Zacks Computer – Peripheral Equipment industry group, which ranks in the top 31% out of more than 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform the market over the next 3 to 6 months.
Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1. It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.
Earnings Trends and Future Estimates
Logitech has built up an impressive earnings history, surpassing earnings estimates in three of the last four quarters. Earlier this week, the company reported fiscal second-quarter earnings of $1.09/share, a 65.15% surprise over the $0.66/share consensus estimate. LOGI has delivered a trailing four-quarter average earnings surprise of 30.41%.
Image Source: Zacks Investment Research
Earnings estimates for Logitech have begun to stabilize, with growth picking up in the next fiscal year. Projections for fiscal 2025 show earnings growth of 30.34% to $3.86/share, with revenues expected to climb 4.05% to $4.25 billion.
Other Bullish Considerations
Growing adoption of new mobile platforms in both mature and emerging markets are fueling demand for Logitech’s peripherals and accessories. The company has been able to leverage its software and go-to-market capabilities to drive market share growth. Logitech’s cloud-based video conferencing services have been a key catalyst. In addition, Logitech’s partnerships with cloud providers like Microsoft and Google are major positives.
The acquisition of Finland’s Loupedeck earlier this year will enhance Logitech’s ability to provide customizable and contextual control experiences for its full portfolio of devices. Loupedeck offers deep native integrations with industry-leading creative software for photo editing, retouching, design and streaming.
Bottom Line
Logitech has begun to show signs of its former glory. The company is ranked favorably by our Zacks Style Scores, with a top ‘A’ mark in our Growth category. This indicates that further upside is likely based on favorable earnings and sales growth metrics.
The future looks bright for this highly-ranked, leading stock. LOGI shares have soared more than 27% this year, and momentum has picked up in October as the market attempts to regain its footing. Backed by a leading industry group and impressive history of earnings beats, it’s not difficult to see why this company is a compelling investment.