Logitech (LOGI) Up 8.3% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Logitech (LOGI). Shares have added about 8.3% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Logitech due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. Logitech Q3 Earnings and Revenues Surpass EstimatesLogitech reported third-quarter fiscal 2025 results, wherein both top and bottom lines surpassed the Zacks Consensus Estimate. LOGI reported third-quarter fiscal 2025 non-GAAP earnings of $1.59 per share, which beat the Zacks Consensus Estimate by 15.2%. The bottom line increased 4% on a year-over-year basis, primarily driven by higher revenues from improved demand and lower product costs, partially offset by higher promotional spending.In the third quarter of fiscal 2025, LOGI reported revenues of $1.34 billion, which surpassed the consensus mark by 7.7%. The top line increased 7% on a reported basis and 6% on a constant currency basis from the prior-year quarter.Logitech’s Segment DetailsLogitech registered sales growth across most key product categories year over year. In the first quarter of fiscal 2024, LOGI reclassified its product segments by removing the Audio & Wearable and Mobile Speakers categories and adding Headsets and Other categories.Revenues from Keyboards & Combos improved 3% year over year to $236.75 million. Gaming revenues increased 14% year over year to $466.72 million. Our model estimates for Keyboards & Combos and Gaming revenues were pegged at $227.2 million and $405.6 million, respectively.Revenues from the Headsets product category jumped 10% to $45.9 million, Pointing Devices grew 5% to $217 million, Tablet Accessories increased 21% to $77.4 million and Video Collaboration increased 4% to $176 million. Our model estimates for Headsets, Pointing Devices, Tablet Accessories and Video Collaboration were pegged at $43.8 million, $203.5 million, $67.2 million and $160.7 million, respectively.On the other hand, Webcams declined 2% to $84.4 million and the Other category’s revenues fell 27% to $36 million. Our estimates for Logitech’s Webcams and Other category’s third-quarter revenues were pegged at $82.2 million and $39.1 million, respectively.Logitech’s Margins & Operating MetricsThe non-GAAP gross profit jumped 9% to $579 million from $531.4 million reported in the year-ago quarter. The non-GAAP gross margin expanded 90 basis points (bps) from the prior-year quarter to 43.2%.Non-GAAP operating expenses increased 10.6% to $313 million. As a percentage of revenues, non-GAAP operating expenses increased 80 bps to 23.4%.The non-GAAP operating income grew 7.1% to $265.9 million from $248.2 million reported in the year-ago quarter. The operating margin remained flat year over year at 19.8%.Logitech’s Liquidity and Shareholder ReturnAs of Dec. 31, 2024, LOGI’s cash and cash equivalents were $1.5 billion, up from $1.36 billion recorded in the previous quarter. Additionally, the company generated $371 million in cash from operational activities in the third quarter of fiscal 2025.In the fiscal third quarter, the company returned $200 million of cash to shareholders through share repurchase.Logitech Raises Fiscal 2025 GuidanceBuoyed by stronger-than-expected third-quarter performance, Logitech raised its guidance for fiscal 2025. It now expects fiscal 2025 sales in the band of $4.54-$4.57 billion, up from the previous guidance of $4.39-$4.47 billion. The revised top-line projection reflects a year-over-year increase in the band of 5.4-6.4%, up from the earlier range of 2-4%.Logitech projects non-GAAP operating profit in the range of $755-$770 million, up from the previous guidance of $720-$750 million. The updated guidance for operating income projects year-over-year growth of 8-10%, up from the previous guidance of 3-7%.How Have Estimates Been Moving Since Then?It turns out, estimates revision have trended downward during the past month.The consensus estimate has shifted -14.88% due to these changes.VGM ScoresCurrently, Logitech has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Logitech has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Logitech International S.A. (LOGI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks