Back to top

Image: Shutterstock

Here's Why NETGEAR (NTGR) is a Promising Investment Bet Now

Read MoreHide Full Article

Shares of NETGEAR, Inc. (NTGR - Free Report) have surged 109.7% over the past year driven by healthy revenues on the back of a flexible business model and solid market response for robust networking solutions. Earnings estimates for the current and next fiscal year have increased 37.7% and 33.7%, respectively, over the past year, implying robust growth potential. With healthy fundamentals, this Zacks Rank #2 (Buy) consumer and electronic equipment manufacturer appears to be a solid investment option at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

Growth Drivers

Headquartered in San Jose, CA, NETGEAR is a global telecommunications firm that offers innovative networking and Internet connected products for seamless networking, broadband access and network connectivity. The company’s products are built on variety of proven technologies such as wireless (Wi-Fi and Long-Term Evolution or LTE), Ethernet and powerline, with focus on reliability and ease-of-use. These products are available in multiple configurations to address the evolving needs of customers in each geographical region where it operates. The company customizes various elements of the software interface and product design, including component specification, physical characteristics such as casing, design and coloration to meet the individual needs of its clients.

NETGEAR continues to capitalize on technology inflections, create new categories and build recurring service revenues to maintain its market leadership position and drive future growth. The company’s revenues have been driven by the rapid increase in Internet connected devices such as smart phones, laptops, tablets and the advent of Smart Home and Internet of Things devices, which have boosted the need for robust networking solutions. An increased market demand for Smart Home and Internet-connected products such as Smart TVs, game consoles, High Definition streaming players, security cameras, thermostats and smoke detectors continues to drive innovations in networking. NETGEAR continues to focus on introducing products into growth areas, which form the basis of Smart Homes as it strives to be the provider of industry-leading networking and smart connected products for consumers, business and service provider markets.

With an exponential growth in data traffic, consumers, businesses and service providers need a complete set of wired and wireless networking and broadband products that are tailored to their specific needs and budgets. The company’s products are designed with an industrial appearance, including metal cases, the ability to mount the product within standard data networking racks as well as unique mounting solutions for other uses and targeting the business market. These products typically include higher port counts, higher data transfer rates and other performance characteristics designed to meet the needs of a business user, providing a competitive edge to outsmart its rivals.

The company continues to introduce new products and services that hinge on affordability, reliability and ease of use. In order to capitalize on the increasing demand for cloud-based applications for small and medium-sized enterprises, NETGEAR is introducing next generation commercial products. These include Power over Ethernet switches, Multi-gigabit Ethernet switches, high capacity local and remote unified storage, small to medium capacity campus wireless local area network, and security appliances. These products are likely to augment the effectiveness and efficiency of its hybrid cloud access network and strengthen its position in the market. With a VGM Score of A, the stock delivered a positive earnings surprise of 59.4%, on average, in the trailing four quarters.

Other Key Picks

Some other top-ranked stocks in the broader industry are Knowles Corporation (KN - Free Report) and Plantronics, Inc. (PLT - Free Report) , sporting a Zacks Rank #1, and Corning Incorporated (GLW - Free Report) carrying a Zacks Rank #2.

Knowles has a long-term earnings growth expectation of 10%. It delivered an earnings surprise of 19.3%, on average, in the trailing four quarters.

Plantronics delivered a trailing four-quarter earnings surprise of 560.4%, on average.

Corning has a long-term earnings growth expectation of 2%. It delivered an earnings surprise of 41.6%, on average, in the trailing four quarters.

+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities

In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.

Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.

Click here to download this report FREE >>

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Corning Incorporated (GLW) - free report >>

NETGEAR, Inc. (NTGR) - free report >>

Knowles Corporation (KN) - free report >>

Plantronics, Inc. (PLT) - free report >>