We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The tech sector is significantly impacted by corporate spending cycles. Dependent on the company’s current and near term outlook, management will decide either to purchase new tech items, or wait another quarter or even a year to make the purchases. Yet one tech company has been able to buck these cycles and post double digit gains in almost every product they sell during a challenging consumer spending environment. That company is Logitech International (LOGI - Free Report) , and they are our Zacks Bull of the Day.
This Zacks Rank #1 (Strong Buy) company designs, manufactures and markets innovative peripherals that provide people with easy access to the digital world. The Company's product family includes Internet video cameras, mice and trackballs, keyboards, audio and telephony products, interactive gaming devices and 3D controllers.
Recent Earnings Results
Last week Logitech posted Q3 17 earnings results where they easily beat bot the Zacks consensus earnings and revenue estimates. On a year over year basis, the company saw gains in retail sales +12%, total revenues +7%, GAAP operating income +41%, non-GAAP operating income +34%, and cash flows from operations rose by 55%. Further, the company saw their mobile speakers, PC gaming, and video collaboration segments grow by more than +20%. Lastly, from an international perspective, revenues improved by +18% in Europe, +7% in the Americas, and +14% in Asia Pacific.
Management’s Take
According to Bracken Darrell, President and CEO, “This Q3, our results exceeded expectations and were outstanding, with broad-based growth across all our regions and almost all product categories. We delivered both the highest retail revenue and the highest non-GAAP gross margin in Logitech’s 35-year history. Our strategy is working, and we are just at the beginning of our path to deliver what we’re capable of. We have significantly raised our outlook on the back of this performance.”
Due to the impressive quarterly results, management increased their guidance for FY 2017; management expects retail sales to grow between +12% to 13% (above their previous guidance between +8% to +10%), and now expects that non-GAAP operating income in a range of $225 to $230 million (above their previous guidance between $195 to $205 million).
Price and Earnings Consensus Graph
As you can see below, LOGI’s stock price has taken off since the second half of 2016. Further, you can see that FY 2017 estimates are above their current price.
Due to the strong quarter and subsequent raise in guidance, earnings estimates have jumped up for Q4 17, FY 17 and FY 18 over the past 7 days. Q4 17 improved from $0.09 to $0.12, FY 17 rose from $0.88 to $1.12, and FY 18 jumped up from $1.00 to $1.18.
Bottom Line
Even with a challenging consumer spending environment, Logitech was able to outperform all expectations in Q3 17, and now they expect to do even better next quarter.
Want to see all of today's Strong Buys?
Today's Bull of the Day is just one of 220 Zacks Rank #1 stocks. Right now the full, up-to-the-minute list is available to you free of charge. There is no better place to start your own stock search. Plus you can access the full list of Zacks Strong Sells and a lot more of our private research. See the stocks free >>.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Bull of the Day: Logitech Intl (LOGI)
The tech sector is significantly impacted by corporate spending cycles. Dependent on the company’s current and near term outlook, management will decide either to purchase new tech items, or wait another quarter or even a year to make the purchases. Yet one tech company has been able to buck these cycles and post double digit gains in almost every product they sell during a challenging consumer spending environment. That company is Logitech International (LOGI - Free Report) , and they are our Zacks Bull of the Day.
This Zacks Rank #1 (Strong Buy) company designs, manufactures and markets innovative peripherals that provide people with easy access to the digital world. The Company's product family includes Internet video cameras, mice and trackballs, keyboards, audio and telephony products, interactive gaming devices and 3D controllers.
Recent Earnings Results
Last week Logitech posted Q3 17 earnings results where they easily beat bot the Zacks consensus earnings and revenue estimates. On a year over year basis, the company saw gains in retail sales +12%, total revenues +7%, GAAP operating income +41%, non-GAAP operating income +34%, and cash flows from operations rose by 55%. Further, the company saw their mobile speakers, PC gaming, and video collaboration segments grow by more than +20%. Lastly, from an international perspective, revenues improved by +18% in Europe, +7% in the Americas, and +14% in Asia Pacific.
Management’s Take
According to Bracken Darrell, President and CEO, “This Q3, our results exceeded expectations and were outstanding, with broad-based growth across all our regions and almost all product categories. We delivered both the highest retail revenue and the highest non-GAAP gross margin in Logitech’s 35-year history. Our strategy is working, and we are just at the beginning of our path to deliver what we’re capable of. We have significantly raised our outlook on the back of this performance.”
Due to the impressive quarterly results, management increased their guidance for FY 2017; management expects retail sales to grow between +12% to 13% (above their previous guidance between +8% to +10%), and now expects that non-GAAP operating income in a range of $225 to $230 million (above their previous guidance between $195 to $205 million).
Price and Earnings Consensus Graph
As you can see below, LOGI’s stock price has taken off since the second half of 2016. Further, you can see that FY 2017 estimates are above their current price.
Logitech International S.A. Price and Consensus
Logitech International S.A. Price and Consensus | Logitech International S.A. Quote
Increasing Estimates
Due to the strong quarter and subsequent raise in guidance, earnings estimates have jumped up for Q4 17, FY 17 and FY 18 over the past 7 days. Q4 17 improved from $0.09 to $0.12, FY 17 rose from $0.88 to $1.12, and FY 18 jumped up from $1.00 to $1.18.
Bottom Line
Even with a challenging consumer spending environment, Logitech was able to outperform all expectations in Q3 17, and now they expect to do even better next quarter.
Want to see all of today's Strong Buys?
Today's Bull of the Day is just one of 220 Zacks Rank #1 stocks. Right now the full, up-to-the-minute list is available to you free of charge. There is no better place to start your own stock search. Plus you can access the full list of Zacks Strong Sells and a lot more of our private research. See the stocks free >>.