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NETGEAR, Inc. (NTGR) Stock Jumps 5.5%: Will It Continue to Soar?

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NETGEAR, Inc. (NTGR - Free Report) shares soared 5.5% in the last trading session to close at $12.18. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 11.4% loss over the past four weeks.

The increase in share price can be attributed to continued healthy demand for the company’s premium Wi-Fi mesh systems, 5G mobile hotspots and ProAV-managed switched products. It had 804,000 paid service subscribers at the end of the last reported quarter, up 22.9% year over year. The company expects to reach about 875,000 paid subscribers by the end of 2023. Strength in demand for premium products along with new product launches across both Orbi and Nighthawk product lines amid the upcoming launch of WiFi 7 bode well.

For the third quarter of 2023, NETGEAR anticipates net revenues in the range of $175-$190 million. Management remains optimistic owing to healthy underlying demand trends in the SMB segment and the premium portion of Connected Home business amid volatile macroeconomic conditions.

This company is expected to post quarterly loss of $0.06 per share in its upcoming report, which represents a year-over-year change of -128.6%. Revenues are expected to be $183.91 million, down 26.3% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For NETGEAR, Inc., the consensus EPS estimate for the quarter has been revised 350% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on NTGR going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

NETGEAR, Inc. is a member of the Zacks Computer - Networking industry. One other stock in the same industry, Infinera (INFN - Free Report) , finished the last trading session 0.5% higher at $4.21. INFN has returned 0.7% over the past month.

Infinera's consensus EPS estimate for the upcoming report has changed -1040% over the past month to -$0.01. Compared to the company's year-ago EPS, this represents a change of -120%. Infinera currently boasts a Zacks Rank of #3 (Hold).

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