Netgear Gets Analyst Rating Upgrades After Q2 Performance
Analysts re-rated Netgear Inc (NASDAQ: NTGR) following the Q2 beat.
BWS Financial analyst Hamed Khorsand upgraded Netgear from Neutral to Buy with a price target of $30.
He saw Netgear reaching the inflection point of rebalancing its channel inventory after deciding to transition away from lower-priced wireless routers aligning with consumer demand for wireless routers softening last year.
It has taken four quarters for NTGR to reach a point where inventory should rebalance by the end of the third quarter, he noted.
The upgrade reflected inventory rebalancing near the end, strong SMB sales trends, and growth within the service provider.
The introduction of the ProAV switches changed the growth trajectory of the segment.
Khorsand did not expect higher sales performance from the SMB segment and found it likely to contribute to NTGR growing revenue in 2023 with the upcoming release of WiFi 7 on deck.
Raymond James analyst Adam Tindle maintained Netgear with an Outperform and cut the price target from $27 to $25.
The re-rating followed the Q2 beat reflecting improving supply chain and cost reduction actions.
Tindle expected better operating leverage as revenue growth outpaced expenses and air freight costs abated.
CHP sales have sharply pulled back since the pandemic boom, but the inventory correction neared an end, setting up future quarters for a more normalized growth/margin profile.
Price Action: NTGR shares traded higher by 19.50% at $24.24 on the last check Thursday.
Photo via Wikimedia Commons
Latest Ratings for NTGR
Date | Firm | Action | From | To |
|---|---|---|---|---|
Feb 2022 | Raymond James | Maintains | Outperform | |
Jan 2022 | Raymond James | Maintains | Outperform | |
Oct 2021 | BWS Financial | Downgrades | Buy | Neutral |
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