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Zacks Industry Outlook Highlights: Logitech, LG Display, Immersion, Microsoft and Zoom Video

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·8 min read
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For Immediate Release

Chicago, IL – June 7, 2021 – Today, Zacks Equity Research discusses Computer - Peripheral, including Logitech International S.A. LOGI, LG Display Co., Ltd. LPL, Immersion Corporation IMMR, Microsoft Corporation MSFT and Zoom Video Communications, Inc. ZM.

Link: https://www.zacks.com/commentary/1654538/3-computer-peripheral-stocks-in-focus-in-a-challenging-industry

The Zacks Computer - Peripheral Equipment industry is showing signs of struggle as demand for remote work and learning is dropping with the availability of vaccines helping economies to open up. As people stay less at home, time spent on playing video games is also expected to decline, thereby hurting demand for gaming accessories.

Nevertheless, LogitechLG Display and Immersion are a few industry participants well set to benefit from the growing demand for professional gaming accessories, PC peripherals, touchscreen devices, smart glasses and RFID solutions. Moreover, solid demand for 3D-printed health equipment like face shields, nasal swabs and ventilator parts has been a tailwind.

Industry Description

The Zacks Computer - Peripheral Equipment industry comprises companies offering computer input, output and storage devices. These include keyboards, mouse, LCD panels, smart glass, analog to digital imaging solutions, touch sensors, 3D printers & additive manufacturing, and transaction-based printer products, among others.

Moreover, video gaming accessories, including gaming mouse, wired gaming headset, in-ear gaming headphone, controllers for Xbox One and Playstation, are offered by these companies. Notably, the highly competitive nature of the industry is encouraging participants to come up with innovative and relevant products to meet the current demand trend. This is strengthening their product portfolios.

3 Trends Shaping the Future of the Computer- Peripheral Equipment Industry

Production and Demand on the Road to Recovery: The computer peripheral equipment industry is slowly overcoming the operational challenges posed by the coronavirus pandemic. Companies are in the process of restarting and arranging their operations according to the new normal. However, the completion of Microsoft’s Windows 10 replacement cycle is likely to keep denting demand for computer peripherals as the industry is dependent on the PC market to a major extent.

Shift in Consumer Preference a Key Catalyst: The gradual shift in consumer preference from mobile gaming to a more professional gaming experience is a major growth driver. Launch of advanced gaming devices and the growing popularity of e-sports leagues are expected to boost prospects. Markedly, e-sports is also likely to continue driving the total addressable market in the gaming peripherals industry.

Moreover, the 3D printing market presents a favorable long-term investment opportunity as a large number of engineers, designers, architects and entrepreneurs are resorting to 3D solutions for primary designing and product modeling. Also, the coronavirus outbreak is resulting in massive demand for gaming equipment and 3D-printed medical equipment, which is a major driving force for this industry during these trying times.

Expanding Global Footprint: Expansion of the total addressable market bodes well for industry participants. Improving penetration into price-sensitive regions like the Asia Pacific and the Middle East & Africa through low-cost quality products enhances prospects.

Zacks Industry Rank Indicates Dim Prospects

The Zacks Computer-Peripheral Equipment industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #176, which places it at the bottom 29% of more than 250 Zacks industries.

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all member stocks, indicates dim near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.

Notably, a few stocks have the potential to outperform the market, based on a strong earnings outlook. But before we present the top industry picks, it is worth taking a look at the industry’s shareholder returns and current valuation first.

Industry Outperforms S&P 500 and Sector

The Zacks Computer-Peripheral Equipment industry has outperformed the S&P 500 composite and the broader Zacks Computer and Technology sector in the past year.

The industry has risen 79.4% over this period compared with the S&P 500’s increase of 34.1% and the broader sector’s rally of 45.2%.

Industry's Current Valuation

On the basis of the trailing 12-month P/S, which is a commonly used multiple for valuing computer peripheral stocks, we see that the industry is currently trading at 0.85X compared with the S&P 500’s 4.70X and the Zacks Computer and Technology sector’s 4.81X.

Over the last five years, the industry has traded as high as 7.05X, as low as 0.52X and at the median of 4.89X.

3 Computer Peripheral Stocks to Watch

LG Display – This Seoul, Republic of Korea-based company primarily manufactures and sells thin-film transistor liquid crystal display panels in a range of sizes and specifications primarily for use in televisions, notebook computers and desktop monitors, as well as for handheld application products, such as mobile phones; and medium and large-size panels for industrial and other applications, including entertainment systems, portable navigation devices, e-paper, digital photo displays and medical diagnostic equipment.

This Zacks Rank #1 (Strong Buy) company supplies products to original equipment manufacturers and multinational corporations. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for its 2021 earnings currently stands at $2.02 per share, unchanged over the past 30 days. The stock has gained 109.1% in the past year.

Logitech – This Switzerland-based company is benefiting from strong momentum in video collaboration, gaming, and creativity & productivity businesses. It has been able to leverage its software and go-to-market capabilities to drive market share gains and growth.

Moreover, the thriving cloud-based video conferencing services will continue to be the key catalyst. Stay-at-home orders due to the coronavirus outbreak are boosting sales. Rising adoption of new mobile platforms in both mature and emerging markets is fueling demand for Logitech’s peripherals and accessories. Further, partnerships with cloud providers like Zoom, Microsoft and Google are major positives for this Zacks Rank #2 (Buy) company.

The Zacks Consensus Estimate for its fiscal 2021 earnings stayed at $4.52 over the past 30 days. Logitech’s shares are up 124.7% in the past year.

Immersion – This San Jose, CA-based hardware and software technology provider enables users to interact with computers using the sense of touch. The company’s patented technologies, which are branded TouchSense, enable devices such as mouse, joysticks, knobs and medical simulation products to deliver tactile sensations that correspond to on-screen events.

The consensus mark for 2021 earnings has declined by a penny to 69 cents per share over the past 30 days for this Zacks Rank #2 stock. Immersion’s shares have gained 20.7% in the past year.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

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 >>

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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Microsoft Corporation (MSFT) : Free Stock Analysis Report
 
Logitech International S.A. (LOGI) : Free Stock Analysis Report
 
LG Display Co., Ltd. (LPL) : Free Stock Analysis Report
 
Immersion Corporation (IMMR) : Free Stock Analysis Report
 
Zoom Video Communications, Inc. (ZM) : Free Stock Analysis Report
 
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