Growing Video And Gaming Demand Will Sustain Future Upside

Key Takeaways

• Remote work trends and growth in gaming are expanding Logitech's market, boosting recurring demand and supporting revenue and margin improvements.
  
• Product innovation, diversification of manufacturing, and investment in software and services are driving premium pricing, mitigating risks, and enhancing profitability.
  
• Temporary tariff-driven gains, rising costs, competitive pricing pressure, and evolving technology trends all threaten sustained demand and long-term earnings stability.

Catalysts

Through its subsidiaries, designs, manufactures, and markets software-enabled hardware solutions that connect people to working, creating, and gaming worldwide.

• Sustained global adoption of hybrid and remote work models is driving strong, recurring demand for video collaboration solutions, webcams, headsets, and productivity peripherals, evidenced by double-digit growth in video conferencing and robust expansion in B2B sales; this increases Logitech's addressable market and supports ongoing net sales growth.
  
• The rapid rise of gaming and streaming, particularly in fast-growth regions like China and APAC, is fueling premium gaming accessory sales and market share gains for Logitech, which strengthens the company's revenue base and enhances gross margins through a focus on higher-ASP segments.
  
• Ongoing product innovation and launches-including design-focused tablet accessories and new offerings tailored toward mobile and on-the-go productivity-capitalize on expanding user segments (e.g., education, on-the-go professionals), enabling price premiums and margin accretion over time.
  
• Diversification of manufacturing footprint across multiple countries (reducing reliance on China) and disciplined cost controls are structurally mitigating tariff risk and operating expense increases, supporting margin resilience and improved net earnings visibility.
  
• Continued investment in recurring-revenue software platforms (e.g., Streamlabs, G HUB), expansion into services, and deeper penetration into new verticals like education and healthcare are setting up new higher-margin revenue streams, expected to gradually lift both top-line and profitability metrics over the long term.

Logitech International Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Logitech International's revenue will grow by 4.2% annually over the next 3 years.
• Analysts assume that profit margins will shrink from 13.8% today to 13.3% in 3 years time.
• Analysts expect earnings to reach $694.8 million (and earnings per share of $5.05) by about July 2028, up from $635.7 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $774.9 million in earnings, and the most bearish expecting $582.1 million.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 22.0x on those 2028 earnings, up from 21.6x today. This future PE is greater than the current PE for the US Tech industry at 21.9x.
• Analysts expect the number of shares outstanding to decline by 3.44% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 5.26%, as per the Simply Wall St company report.

Logitech International Future Earnings Per Share Growth

Risks

• Persistent tariff uncertainty and potential for higher trade barriers could drive increased costs of goods sold, impacting net margins and overall earnings, especially as the impact of tariffs is not fully neutralized and depends on evolving US-China trade relations and classification exemptions.
  
• Rising prices to offset cost pressures (e.g., due to tariffs) may reduce consumer demand and/or market share in key regions like North America, affecting both top-line revenue growth and earnings if price elasticity turns out to be unfavorable or consumer sentiment weakens.
  
• Strong recent growth is partly driven by temporary factors such as inventory pull-forward and channel fill ahead of tariff changes, which may not repeat, leading to possible revenue and growth deceleration in subsequent quarters as these one-off effects unwind.
  
• Intensifying competition in gaming and core peripherals-especially from low-cost Asian manufacturers and device bundling by OEMs-could erode Logitech's pricing power and margins, impacting both revenue stability and long-term earnings growth.
  
• The ongoing shift toward device convergence and alternative input methods (like touch, voice, and AI-potentially reducing demand for traditional peripherals), along with slower PC refresh cycles, may limit Logitech's total addressable market over the long term, posing a risk to sustained revenue growth.

Valuation

• The analysts have a consensus price target of CHF80.178 for Logitech International based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of CHF103.19, and the most bearish reporting a price target of just CHF60.69.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $5.2 billion, earnings will come to $694.8 million, and it would be trading on a PE ratio of 22.0x, assuming you use a discount rate of 5.3%.
  
• Given the current share price of CHF74.88, the analyst price target of CHF80.18 is 6.6% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.