NETGEAR Inc.
NTGR
appears to be a promising stock to add to the portfolio to tackle the current macroeconomic and geopolitical uncertainties and benefit from its solid fundamentals and growth prospects.
Let’s look at the factors that make the stock an attractive pick:
Attractive Pricing:
Wall Street is facing extreme volatility due to macroeconomic factors such as rising inflation and continuous interest rate hikes by the Federal Reserve, the ongoing Russia-Ukraine war, inflated crude oil prices and lingering supply-chain woes.
The above-mentioned factors are taking a toll on major U.S. indices. Year to date, the S&P 500 has declined 21%. In such a scenario, stocks such as NTGR can be a sound addition to one’s investment portfolio.
The stock is down 43.4% from its 52-week high level of $31 on Jan 6, 2022, making it relatively affordable for investors.
Solid Rank:
NTGR currently carries a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Strong Fundamental Drivers
Headquartered in San Jose, CA, NETGEAR is a global telecommunications firm that offers innovative networking and Internet-connected products for seamless networking, broadband access and network connectivity.
The company’s performance is benefiting from robust demand for premium Wi-Fi mesh systems and 5G mobile hotspots in retail and service channels.
The company is also gaining from rapid increase in Internet connected devices including smart phones, laptops, tablets and the introduction of Smart Home and Internet of Things devices, which have increased the demand for robust networking solutions.
The continued demand for ProAV-managed switched products owing to the growing demand for digital AV-over-IP Ethernet solutions by the AV industry bodes well. It had 666,000 paid service subscribers at the end of the last-reported quarter. This indicates healthy potential for its long-term profitability growth.
For the fourth quarter of 2022, NETGEAR anticipates net revenues of $235-$250 million as the company remains optimistic that SMB and the CHP service provider channel will gain momentum amid supply-chain constraints.
The company anticipates that the service provider channel will generate about $50 million in sales in the fourth quarter.
Other Stocks to Consider
Some other top-ranked stocks from the broader technology space are
Arista Networks
ANET
,
Jabil
JBL
and
Super Micro Computer
SMCI
, each presently sporting a Zacks Rank #1.
The Zacks Consensus Estimate for Arista Networks 2022 earnings is pegged at $4.37 per share, up 8.2% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 12.7%. Shares of ANET have declined 18.4% in the past year.
The Zacks Consensus Estimate for Jabil’s 2023 earnings is pegged at $8.31 per share, rising 1,6% in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.
Jabil’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 8.9%. Shares of JBL have declined 3.6% in the past year.
The Zacks Consensus Estimate for Super Micro Computer’s fiscal 2023 earnings is pegged at $9.58 per share, rising 19.8% in the past 60 days.
Super Micro Computer’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 9.4%. Shares of SMCI have soared 83.6% in the past year.
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