NETGEAR (NASDAQ:NTGR) Issues Quarterly Earnings Results, Beats Estimates By $0.18 EPS

NETGEAR (NASDAQ:NTGR) announced its quarterly earnings data on Wednesday. The communications equipment provider reported $0.13 EPS for the quarter, topping analysts’ consensus estimates of ($0.05) by $0.18, FiscalAI reports. The firm had revenue of $167.35 million during the quarter, compared to analyst estimates of $170.00 million. NETGEAR had a negative return on equity of 2.79% and a negative net margin of 3.71%. The company’s revenue was down 9.3% on a year-over-year basis. During the same period last year, the company earned $0.12 earnings per share.

Here are the key takeaways from NETGEAR’s conference call:

• Underlying enterprise demand remains strong: Enterprise end-customer sell-through grew about 6% year over year, led by double-digit growth in managed switches, while its backlog climbed to more than 2.5 times the prior quarter’s level. Enterprise gross margin rose to 53.2%, and software momentum included a doubling of Insight billings year over year.
• Manufacturing execution is limiting sales: A partner’s poorly executed factory transition constrained product output despite available components, holding enterprise revenue roughly flat year over year and also affecting consumer routers. NETGEAR expects constraints to continue into Q1 2027; some consumer demand was perishable and could be lost.
• NETGEAR reported Q3 revenue of $167.3 million and non-GAAP operating income of $3.3 million, its fifth consecutive profitable quarter and above its guidance range. The company attributed the result to favorable gross margins and expense discipline, with enterprise generating about 70% of non-GAAP gross profit.
• Near-term profitability faces pressure: Q4 revenue is forecast at $160 million to $175 million, with consolidated gross margin expected to decline about 150 basis points sequentially, primarily from higher memory and transportation costs. Consumer revenue fell 18.2% year over year in Q3, and management expects elevated component costs to continue weighing on that business.

NETGEAR Price Performance

NTGR stock opened at $22.32 on Thursday. NETGEAR has a twelve month low of $19.00 and a twelve month high of $30.46. The business’s fifty day moving average is $22.27 and its 200-day moving average is $22.95.

Wall Street Analyst Weigh In

A number of research analysts have issued reports on NTGR shares. Stifel Nicolaus cut their target price on shares of NETGEAR from $36.00 to $30.00 and set a “buy” rating on the stock in a research report on Monday, October 5th. Weiss Ratings reiterated a “sell (d)” rating on shares of NETGEAR in a research report on Monday, September 21st. Finally, Wall Street Zen raised shares of NETGEAR from a “sell” rating to a “hold” rating in a research note on Sunday, September 6th. One research analyst has rated the stock with a Buy rating, one has issued a Hold rating and one has issued a Sell rating to the company’s stock. According to MarketBeat, NETGEAR has an average rating of “Hold” and a consensus price target of $30.00.

About NETGEAR

NETGEAR, Inc develops and sells networking products and connected technology for consumers, small and medium-sized businesses, and service providers. Its portfolio includes wireless routers, mesh Wi-Fi systems, cable and 5G modems, Wi-Fi extenders, network switches, wireless access points, and related connectivity products.

The company markets consumer products under brands such as Nighthawk and Orbi, while its business-oriented offerings include managed networking, switching, wireless access points, and cloud-based network management through the NETGEAR Insight platform.