Strength Seen in NETGEAR (NTGR): Can Its 14.2% Jump Turn into More Strength?

NETGEAR, Inc. NTGR shares soared 14.2% in the last trading session to close at $23.07. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 13.7% loss over the past four weeks.The increase in share price can attributed to President Trump’s announcement of a 90-day pause on reciprocal tariffs, barring China. This led to skyrocketing indices and subsequent increases for most stocks including NETGEAR. Apart from that, the company specific factors are also driving the stock price performance. Strength in the NETGEAR for Business (“NFB”) segment as well as in the premium products portfolio within the Connected Home (CHP) business bodes well. Driven by ongoing momentum for ProAV managed switch products (which grew in double digits year over year), revenues from the NFB segment jumped 14.9% and 2.9% sequentially to $80.8 million. Efforts to expand Wi-Fi LAN business are another tailwind. Moreover, NETGEAR completed a successful destocking plan across CHP and NFB, leading to an $86 million reduction in inventory in 2024. This is expected to help the company align sell-in with sell-through with channel partners, thereby increasing revenue predictability. NTGR will be directing the majority of incremental investments for the year toward its NFB business with special emphasis on in-sourcing software capabilities, expanding product portfolio and developing a robust B2B go-to-market capability to enhance market share.NETGEAR is confident to retain a competitive edge in new product introductions based on the Wi-Fi 6 and 7 standards. The company introduced key products, such as the M7 Pro, the first mobile hotspot combining 5G and WiFi 7, generating significant consumer interest. The increasing demand for new WiFi 7 home networking products is expected to drive top-line expansion in the coming days.This company is expected to post quarterly loss of $0.35 per share in its upcoming report, which represents a year-over-year change of -25%. Revenues are expected to be $152.07 million, down 7.6% 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, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. 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 #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>NETGEAR is part of the Zacks Computer - Networking industry. Digi International DGII, another stock in the same industry, closed the last trading session 14.4% higher at $26.47. DGII has returned -18.7% in the past month.For Digi International, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.49. This represents no change from what the company reported a year ago. Digi International currently has a Zacks Rank of #2 (Buy).7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>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 NETGEAR, Inc. (NTGR): Free Stock Analysis Report Digi International Inc. (DGII): 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