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.
NETGEAR (NTGR) Reports Narrower-Than-Expected Loss in Q4
Read MoreHide Full Article
NETGEAR, Inc (NTGR - Free Report) reported fourth-quarter 2022 non-GAAP loss of 3 cents per share against non-GAAP earnings of 27 cents recorded in the year-ago quarter. However, it came in narrower than the Zacks Consensus Estimate loss of 8 cents per share.
NETGEAR generated net revenues of $249.1 million, down 0.8% year over year. The downtick resulted from the weakness in the retail segment of the connected home business, partly offset by strong revenue growth in the SMB segment. However, the top line beat the consensus estimate of $242.6 million.
Region-wise, net revenues from the Americas were $159.2 million (64% of net revenues), down 0.2% year over year. Europe, Middle East and Africa revenues (21%) were $52.7 million, up 5.4%. The Asia Pacific Region revenues (15%) were down 10.8% to $37.2 million.
The number of registered app users in the reported quarter was 16.2 million. NETGEAR ended the quarter with 747,000 paid service subscribers.
Following the announcement, shares of the company went down 5% in the pre-market trading on Feb 2, 2023. Shares of the company lost 26.6% compared with the industry’s decline of 11.6% in the past year.
Image Source: Zacks Investment Research
Segmental Performance
Connected Home (including Nighthawk, Orbi, Nighthawk Pro Gaming and Meural brands) delivered revenues of $149 million, down 14.4% year over year. The downtick was due to softness in the retail business, which had witnessed pandemic-led elevated consumer demand in the prior-year period. However, the segment witnessed strong demand for premium Wi-Fi mesh systems and 5G mobile hotspots.
Orbi 8 and Orbi 9 WiFi mesh products and 5G mobile hotspots helped the company to improve its connected home business. The company also unveiled M6 Pro 5G mobile hotspots to further grow its CHP business.
NETGEAR holds about 39% share in the U.S. retail Wi-Fi market, including mesh, routers, gateways and extenders.
In the quarter under review, the company announced the launch of WAX220 WiFi 6 AX4200 Dual-band Access Point (WAX220) to tap the growing demand for cheap and fast network connectivity. Customers can purchase the product for $199.99 from the company’s website and install the WiFi within 10 minutes without any complexity.
Driven by the strong demand for ProAV-managed switched products, revenues from SMB rose 29.9% year over year to $100.1 million.
Other Details
The adjusted gross margin decreased to 24.9% from 30% year over year due to lower revenues. The non-GAAP operating margin was (1.6)% compared with 2.7% in the year-ago quarter.
Cash Flow & Liquidity
As of Dec 31, 2022, NETGEAR used $13.7 million in cash from operations. As of Dec 31, 2022, the company had $146.5 million in cash and cash equivalents and $345.9 million of total current liabilities compared with $132.9 million and $330.4 million, respectively, in the quarter that ended Oct 3, 2022.
The company did not repurchase any shares in the quarter under review.
Q4 Outlook
For the first quarter of 2023, NETGEAR anticipates net revenues of $185-$200 million as the company remains optimistic that SMB and the CHP service provider channel will gain momentum amid supply-chain constraints.
The company anticipates that the service provider channel will generate about $25 million in sales in the first quarter.
Owing to increasing air freight costs and foreign currency volatility, the GAAP operating margin is estimated to be between (4.7)% and (3.7)%. The non-GAAP operating margin is expected to be between (2)% and (1)%.
The Zacks Consensus Estimate for Arista Networks 2022 earnings is pegged at $4.38 per share, rising 0.2 in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 12.7%. Shares of ANET have increased 1.4% in the past year.
The Zacks Consensus Estimate for Jabil’s 2023 earnings is pegged at $8.37 per share, rising 2.3% in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.
Jabil’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 8.8%. Shares of JBL have increased 26.4% in the past year.
The Zacks Consensus Estimate for Super Micro Computer’s fiscal 2023 earnings is pegged at $9.54 per share, up by 4.1% in the past 60 days.
Super Micro Computer’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 7.8%. Shares of SMCI have been up 70.7% in the past year.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
NETGEAR (NTGR) Reports Narrower-Than-Expected Loss in Q4
NETGEAR, Inc (NTGR - Free Report) reported fourth-quarter 2022 non-GAAP loss of 3 cents per share against non-GAAP earnings of 27 cents recorded in the year-ago quarter. However, it came in narrower than the Zacks Consensus Estimate loss of 8 cents per share.
NETGEAR generated net revenues of $249.1 million, down 0.8% year over year. The downtick resulted from the weakness in the retail segment of the connected home business, partly offset by strong revenue growth in the SMB segment. However, the top line beat the consensus estimate of $242.6 million.
Region-wise, net revenues from the Americas were $159.2 million (64% of net revenues), down 0.2% year over year. Europe, Middle East and Africa revenues (21%) were $52.7 million, up 5.4%. The Asia Pacific Region revenues (15%) were down 10.8% to $37.2 million.
NETGEAR, Inc. Price, Consensus and EPS Surprise
NETGEAR, Inc. price-consensus-eps-surprise-chart | NETGEAR, Inc. Quote
The number of registered app users in the reported quarter was 16.2 million. NETGEAR ended the quarter with 747,000 paid service subscribers.
Following the announcement, shares of the company went down 5% in the pre-market trading on Feb 2, 2023. Shares of the company lost 26.6% compared with the industry’s decline of 11.6% in the past year.
Image Source: Zacks Investment Research
Segmental Performance
Connected Home (including Nighthawk, Orbi, Nighthawk Pro Gaming and Meural brands) delivered revenues of $149 million, down 14.4% year over year. The downtick was due to softness in the retail business, which had witnessed pandemic-led elevated consumer demand in the prior-year period. However, the segment witnessed strong demand for premium Wi-Fi mesh systems and 5G mobile hotspots.
Orbi 8 and Orbi 9 WiFi mesh products and 5G mobile hotspots helped the company to improve its connected home business. The company also unveiled M6 Pro 5G mobile hotspots to further grow its CHP business.
NETGEAR holds about 39% share in the U.S. retail Wi-Fi market, including mesh, routers, gateways and extenders.
In the quarter under review, the company announced the launch of WAX220 WiFi 6 AX4200 Dual-band Access Point (WAX220) to tap the growing demand for cheap and fast network connectivity. Customers can purchase the product for $199.99 from the company’s website and install the WiFi within 10 minutes without any complexity.
Driven by the strong demand for ProAV-managed switched products, revenues from SMB rose 29.9% year over year to $100.1 million.
Other Details
The adjusted gross margin decreased to 24.9% from 30% year over year due to lower revenues. The non-GAAP operating margin was (1.6)% compared with 2.7% in the year-ago quarter.
Cash Flow & Liquidity
As of Dec 31, 2022, NETGEAR used $13.7 million in cash from operations. As of Dec 31, 2022, the company had $146.5 million in cash and cash equivalents and $345.9 million of total current liabilities compared with $132.9 million and $330.4 million, respectively, in the quarter that ended Oct 3, 2022.
The company did not repurchase any shares in the quarter under review.
Q4 Outlook
For the first quarter of 2023, NETGEAR anticipates net revenues of $185-$200 million as the company remains optimistic that SMB and the CHP service provider channel will gain momentum amid supply-chain constraints.
The company anticipates that the service provider channel will generate about $25 million in sales in the first quarter.
Owing to increasing air freight costs and foreign currency volatility, the GAAP operating margin is estimated to be between (4.7)% and (3.7)%.
The non-GAAP operating margin is expected to be between (2)% and (1)%.
Zacks Rank & Stocks to Consider
NETGEAR currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology space are Arista Networks (ANET - Free Report) , Jabil (JBL - Free Report) and Super Micro Computer (SMCI - Free Report) . Jabil sports a Zacks Rank #1 (Strong Buy), while Arista Networks and Super Micro Computer carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Arista Networks 2022 earnings is pegged at $4.38 per share, rising 0.2 in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 12.7%. Shares of ANET have increased 1.4% in the past year.
The Zacks Consensus Estimate for Jabil’s 2023 earnings is pegged at $8.37 per share, rising 2.3% in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.
Jabil’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 8.8%. Shares of JBL have increased 26.4% in the past year.
The Zacks Consensus Estimate for Super Micro Computer’s fiscal 2023 earnings is pegged at $9.54 per share, up by 4.1% in the past 60 days.
Super Micro Computer’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 7.8%. Shares of SMCI have been up 70.7% in the past year.