DB:NGJ

Stock Analysis Report

Executive Summary

NETGEAR, Inc. designs, develops, and markets networking technologies and Internet connected products for consumers, businesses, and service providers.


Snowflake Analysis

Flawless balance sheet with proven track record.


Similar Companies

Share Price & News

How has NETGEAR's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NGJ's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-16.0%

NGJ

-12.8%

DE Communications

-9.1%

DE Market


1 Year Return

-47.6%

NGJ

-18.5%

DE Communications

2.9%

DE Market

Return vs Industry: NGJ underperformed the German Communications industry which returned -14.7% over the past year.

Return vs Market: NGJ underperformed the German Market which returned 6.5% over the past year.


Shareholder returns

NGJIndustryMarket
7 Day-16.0%-12.8%-9.1%
30 Day-30.6%-17.9%-7.2%
90 Day-25.7%-24.1%-6.5%
1 Year-47.6%-47.6%-18.1%-18.5%6.1%2.9%
3 Year-67.5%-67.5%-23.8%-24.0%3.5%-5.6%
5 Year-41.3%-41.3%55.7%55.4%8.0%-6.8%

Price Volatility Vs. Market

How volatile is NETGEAR's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is NETGEAR undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NGJ (€18.2) is trading below our estimate of fair value (€57.74)

Significantly Below Fair Value: NGJ is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: NGJ is poor value based on its PE Ratio (24.1x) compared to the Communications industry average (17.7x).

PE vs Market: NGJ is poor value based on its PE Ratio (24.1x) compared to the German market (20x).


Price to Earnings Growth Ratio

PEG Ratio: NGJ is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: NGJ is good value based on its PB Ratio (1x) compared to the DE Communications industry average (2.9x).


Next Steps

Future Growth

How is NETGEAR forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

22.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NGJ's forecast earnings growth (22.3% per year) is above the savings rate (-0.4%).

Earnings vs Market: NGJ's earnings (22.3% per year) are forecast to grow faster than the German market (13.1% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: NGJ's revenue (3.1% per year) is forecast to grow slower than the German market (5.1% per year).

High Growth Revenue: NGJ's revenue (3.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NGJ's Return on Equity is forecast to be low in 3 years time (7.7%).


Next Steps

Past Performance

How has NETGEAR performed over the past 5 years?

-8.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NGJ has high quality earnings.

Growing Profit Margin: NGJ's current net profit margins (2.6%) are higher than last year (1.6%).


Past Earnings Growth Analysis

Earnings Trend: NGJ's earnings have declined by -8.1% per year over the past 5 years.

Accelerating Growth: NGJ's earnings growth over the past year (48.9%) exceeds its 5-year average (-8.1% per year).

Earnings vs Industry: NGJ earnings growth over the past year (48.9%) exceeded the Communications industry 31.6%.


Return on Equity

High ROE: NGJ's Return on Equity (4.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is NETGEAR's financial position?


Financial Position Analysis

Short Term Liabilities: NGJ's short term assets ($744.1M) exceed its short term liabilities ($298.4M).

Long Term Liabilities: NGJ's short term assets ($744.1M) exceed its long term liabilities ($48.7M).


Debt to Equity History and Analysis

Debt Level: NGJ is debt free.

Reducing Debt: NGJ has not had any debt for past 5 years.

Debt Coverage: NGJ has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: NGJ has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: NGJ has a high level of physical assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if NGJ's debt is covered by short term assets.


Next Steps

Dividend

What is NETGEAR's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.5%markettop25%3.9%industryaverage2.1%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate NGJ's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate NGJ's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if NGJ's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if NGJ's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of NGJ's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

6.6yrs

Average management tenure


CEO

Patrick Lo (62yo)

17.9yrs

Tenure

US$7,095,858

Compensation

Mr. C. S. Lo, also known as Patrick, co-founded Netgear Inc. and has also been its Chief Executive Officer since March 2002. Mr. Lo served as the President of Netgear Inc. from September 1999 to March 2002 ...


CEO Compensation Analysis

Compensation vs Market: Patrick's total compensation ($USD7.10M) is above average for companies of similar size in the German market ($USD806.59K).

Compensation vs Earnings: Patrick's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
C. Lo
Co-Founder17.9yrsUS$7.10m1.37% $7.0m
Bryan Murray
Chief Financial Officer1.5yrsUS$1.89m0.011% $57.3k
Michael Falcon
Chief Operations Officer11.1yrsUS$2.66m0.087% $438.5k
Andrew Kim
Senior VP of Corporate Development6.6yrsUS$3.57m0.074% $375.7k
Michael Werdann
Senior Vice President of Worldwide Sales4.3yrsUS$1.97m0.0019% $9.4k
Mark Merrill
Co-Founder & CTO0yrsUS$275.22k0.068% $345.7k
Christopher Genualdi
Director of Investor Relations & Corporate Development0yrsno datano data
Heidi Cormack
Senior Vice President of Global Marketing0yrsno data0.046% $230.7k
Tamesa Rogers
Senior Vice President of Human Resources6.6yrsno data0.042% $212.9k
David Henry
Senior Vice President of Connected Home Products4.1yrsUS$1.49m0.036% $182.4k

6.6yrs

Average Tenure

48yo

Average Age

Experienced Management: NGJ's management team is seasoned and experienced (6.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
C. Lo
Co-Founder17.9yrsUS$7.10m1.37% $7.0m
Janice Roberts
Director1yrsno data0.0050% $25.2k
Barbara Scherer
Independent Director8.5yrsUS$274.97k0.041% $208.8k
Jef Graham
Independent Director14.6yrsUS$252.47k0.017% $86.0k
Thomas Waechter
Lead Independent Director1.1yrsUS$257.47k0.061% $310.9k
Gregory Rossmann
Independent Director18yrsUS$249.97k0.10% $531.8k
Laura Durr
Director0.08yrsno datano data
Bradley Maiorino
Independent Director1.6yrsUS$212.06k0.0096% $48.7k
Maureen Mericle
Director0.2yrsno datano data

1.6yrs

Average Tenure

62yo

Average Age

Experienced Board: NGJ's board of directors are not considered experienced ( 1.6 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: NGJ insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

NETGEAR, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: NETGEAR, Inc.
  • Ticker: NGJ
  • Exchange: DB
  • Founded: 1996
  • Industry: Communications Equipment
  • Sector: Tech
  • Market Cap: US$556.975m
  • Listing Market Cap: US$506.457m
  • Shares outstanding: 29.45m
  • Website: https://www.netgear.com

Number of Employees


Location

  • NETGEAR, Inc.
  • 350 East Plumeria Drive
  • San Jose
  • California
  • 95134
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NTGRNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJul 2003
NGJDB (Deutsche Boerse AG)YesCommon StockDEEURJul 2003

Biography

NETGEAR, Inc. designs, develops, and markets networking technologies and Internet connected products for consumers, businesses, and service providers. It operates in two segments, Connected Home, and Small and Medium Business. The company offers smart home/connected home/broadband access products, such as broadband modems, WiFi gateways, WiFi hotspots, WiFi routers and home WiFi systems, WiFi range extenders, Powerline adapters and bridges, WiFi network adapters, and digital canvasses; and value added service offerings, including technical support, parental controls, and cybersecurity protection. It also provides Ethernet switches, wireless controllers and access points, unified storage products, and Internet security appliances for small and medium-sized businesses. The company markets and sells its products through traditional retailers, online retailers, wholesale distributors, direct market resellers, value-added resellers, and broadband service providers in the Americas, Europe, the Middle-East, Africa, and the Asia Pacific. NETGEAR, Inc. was founded in 1996 and is headquartered in San Jose, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/28 21:14
End of Day Share Price2020/02/28 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.