NETGEAR Stock Soars 95% in the Past Year: Will This Uptrend Last?

NETGEAR Inc. NTGR stock has jumped 95% in the past year compared with the S&P 500 composite and the sub-industry’s growth of 25.3% and 16.4%, respectively. NTGR’s stock price appreciation is driven by continued strength across its NETGEAR for Business (“NFB”) and Connected Home (“CHP”) business units. Loss estimates for 2024 have narrowed to $1.10 per share from a loss of $1.53 over the past 90 days.One-Year Stock PerformanceImage Source: Zacks Investment ResearchFactors Favoring NTGRSan Jose, CA-based NETGEAR is a top provider of advanced, high-performance and premium networking technologies and Internet-connected products for consumers, businesses and service providers. It sells its products through multiple sales channels worldwide, including wholesale distributors, traditional and online retailers, direct market resellers, value-added resellers, broadband service providers and through its website across Americas, Europe, Middle-East and Africa and Asia-Pacific.The NFB segment is driven by the rising demand for its ProAV managed switch products, which cater to the evolving needs of professional audio-video environments. Backed by a robust portfolio of premium products and increasing demand for cutting-edge solutions like the new M7 Pro mobile hotspots and Nighthawk devices, the CHP business is poised for market expansion. In addition, it has successfully executed a destocking strategy across its CHP and NFB segments, achieving a $27 million reduction in inventory during the last reported quarter. This initiative is designed to better align sell-in with sell-through for its channel partners, enhancing revenue predictability. The company reported a 22% increase in recurring services revenues for the quarter, bringing its total subscriber count to 555,000. The steady growth in subscriber revenues is critical for ensuring long-term financial stability and strengthening cash flow generation.Fresh Product Launches Cushion NTGR’s Growth ProspectsNETGEAR is capitalizing on the growing demand for advanced networking solutions driven by more connected devices and the shift to WiFi 7, which is 2.4 times faster than its predecessor. The company has expanded its WiFi 7 portfolio with new products like the RS600, RS500, RS200 routers and the WBE710 Tri-band WiFi 7 Access Point, offering faster speeds, lower latency and enhanced security. Also, it launched a next-generation 5G mobile hotspot. Focused on affordability, reliability and ease of use, these innovations strengthen its position across consumer, business and service provider markets.Headwinds Hurting NTGR’s ProspectsNETGEAR continues to be plagued by a weak macroeconomic backdrop and rising costs, which weigh on its performance. Margins are expected to remain under pressure due to ongoing inventory reduction initiatives and higher transportation expenses, including disruptions caused by the Red Sea shipping crisis.The company expects heightened promotional activities in its CHP segment's retail business during the holiday season, which could further hurt margins. In addition, fourth-quarter revenues from the service provider channel are projected to be around $20 million, reflecting a slight sequential decline due to the earlier launch of the M7 Pro mobile hotspot.End NoteWith a Zacks Rank #3 (Hold), NTGR appears to be treading in the middle of the road, and new investors could be better off if they trade with caution. It delivered an earnings surprise of 164%, on average, in the trailing four quarters. The company has an average brokerage recommendation (ABR) of 2 on a scale of 1 to 5 (Strong Buy to Strong Sell). ABR is the calculated average of actual recommendations made by brokerage firms and portends the future potential of the stock.Key PicksKeysight Technologies, Inc. KEYS carries a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.In the last reported quarter, it delivered an earnings surprise of 5.10%. Keysight is expected to benefit from the growing proliferation of electronic content in vehicles, momentum in space and satellite applications and rising adoption of driver-assistance systems globally.InterDigital IDCC sports a Zacks Rank #1 at present. In the last reported quarter, it delivered an earnings surprise of 114.47%.It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops a wide range of advanced technology solutions used in digital cellular, wireless 3G, 4G and IEEE 802-related products and networks.Ubiquiti Inc. UI sports a Zacks Rank #1 at present. In the last reported quarter, Ubiquiti delivered an earnings surprise of 20.9%. Its highly flexible global business model remains apt to adapt to the changing market dynamics to overcome challenges while maximizing growth.The company’s effective management of its strong global network of more than 100 distributors and master resellers improved its visibility for future demand and inventory management techniques. Just Released: Zacks Top 10 Stocks for 2024Hurry – you can still get in early on our 10 top tickers for 2025. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2025. You can still be among the first to see these just-released stocks with enormous potential. See New Top 10 Stocks >>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 InterDigital, Inc. (IDCC): Free Stock Analysis Report NETGEAR, Inc. (NTGR): Free Stock Analysis Report Keysight Technologies Inc. (KEYS): Free Stock Analysis Report Ubiquiti Inc. (UI): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks