Zacks Investment Research Downgrades NETGEAR (NASDAQ:NTGR) to Strong Sell

NETGEAR (NASDAQ:NTGRGet Rating) was downgraded by Zacks Investment Research from a “hold” rating to a “strong sell” rating in a report issued on Wednesday, Zacks.com reports. They presently have a $19.00 target price on the communications equipment provider’s stock. Zacks Investment Research‘s target price indicates a potential downside of 12.76% from the stock’s previous close.

According to Zacks, “NETGEAR’s Q1 performance was affected by weakness in the Connected Home segment. The segment witnessed decline in revenues owing to tepid performance of the domestic Wi-Fi market. Pandemic-induced widespread supply-chain issues and a Shenzhen shutdown interrupted component supplies to factories in Southeast Asia, thereby negatively impacting Small and Medium Business (SMB) segment  revenues. Higher material and production costs along with increasing transportation costs, exerted pressure on the margins. Shares have underperformed the industry year to date. However, the company continues to witness robust demand for Wi-Fi 6 access points and SMB wireless products, along with ProAV switching solutions. It ended first-quarter 2022 with 627,000 service subscribers. The company is confident of tapping 750,000 paid subscribers by the end of 2022.”

A number of other equities analysts have also recently issued reports on the stock. BWS Financial decreased their price objective on shares of NETGEAR from $30.00 to $27.00 in a research report on Monday, April 18th. Deutsche Bank Aktiengesellschaft decreased their price objective on shares of NETGEAR from $25.00 to $22.00 in a research report on Thursday, April 28th. TheStreet cut shares of NETGEAR from a “c” rating to a “d+” rating in a research report on Thursday, April 28th. StockNews.com cut shares of NETGEAR from a “hold” rating to a “sell” rating in a research report on Monday. Finally, Raymond James decreased their price objective on shares of NETGEAR from $34.00 to $31.00 and set an “outperform” rating on the stock in a research report on Thursday, February 3rd. Two analysts have rated the stock with a sell rating, two have issued a hold rating and one has given a buy rating to the company’s stock. According to data from MarketBeat.com, the stock has an average rating of “Hold” and a consensus target price of $24.75.

NASDAQ:NTGR traded down $0.31 during trading hours on Wednesday, reaching $21.78. The company’s stock had a trading volume of 1,759 shares, compared to its average volume of 250,942. The company has a market capitalization of $635.10 million, a price-to-earnings ratio of -19.80 and a beta of 0.78. The firm’s 50-day moving average price is $23.96. NETGEAR has a 1 year low of $19.41 and a 1 year high of $41.96.

NETGEAR (NASDAQ:NTGRGet Rating) last issued its earnings results on Wednesday, April 27th. The communications equipment provider reported ($0.28) EPS for the quarter, missing analysts’ consensus estimates of $0.02 by ($0.30). NETGEAR had a negative return on equity of 4.45% and a negative net margin of 2.90%. During the same quarter in the previous year, the firm posted $0.72 earnings per share. Sell-side analysts expect that NETGEAR will post 1.24 earnings per share for the current fiscal year.

In related news, SVP Vikram Mehta sold 1,844 shares of the business’s stock in a transaction dated Thursday, February 3rd. The shares were sold at an average price of $25.60, for a total transaction of $47,206.40. The sale was disclosed in a legal filing with the SEC, which is accessible through this link. Also, SVP Heidi Cormack sold 2,105 shares of the business’s stock in a transaction dated Thursday, April 21st. The shares were sold at an average price of $22.52, for a total transaction of $47,404.60. Following the transaction, the senior vice president now owns 61,421 shares in the company, valued at approximately $1,383,200.92. The disclosure for this sale can be found here. Insiders have sold 6,709 shares of company stock worth $155,165 in the last quarter. 4.70% of the stock is owned by corporate insiders.

A number of large investors have recently bought and sold shares of NTGR. Royal Bank of Canada boosted its stake in NETGEAR by 187.3% during the second quarter. Royal Bank of Canada now owns 839 shares of the communications equipment provider’s stock worth $32,000 after acquiring an additional 547 shares in the last quarter. C M Bidwell & Associates Ltd. bought a new stake in NETGEAR during the first quarter worth about $36,000. Pinebridge Investments L.P. bought a new stake in NETGEAR during the fourth quarter worth about $73,000. Captrust Financial Advisors boosted its stake in NETGEAR by 24.6% during the third quarter. Captrust Financial Advisors now owns 3,088 shares of the communications equipment provider’s stock worth $99,000 after acquiring an additional 609 shares in the last quarter. Finally, ProShare Advisors LLC bought a new stake in NETGEAR during the fourth quarter worth about $217,000. 93.08% of the stock is currently owned by institutional investors and hedge funds.

About NETGEAR (Get Rating)

NETGEAR, Inc designs, develops, and markets networking and Internet connected products for consumers, businesses, and service providers. The company operates in two segments, Connected Home, and Small and Medium Business. It offers smart home/connected home/broadband access products, such as Wi-Fi routers and home Wi-Fi systems, broadband modems, Wi-Fi gateways, Wi-Fi hotspots, Wi-Fi range extenders, Powerline adapters and bridges, Wi-Fi network adapters, and digital canvasses; and value-added service offerings, including technical support, parental controls, and cybersecurity protection.

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