NasdaqGS:NTGR

Stock Analysis Report

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Executive Summary

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

Rewards

Trading at 84.1% below our estimate of its fair value

Earnings grew by 4.7% over the past year

Risk Analysis

No risks detected for NTGR from our risk checks.


Snowflake Analysis

Flawless balance sheet and good value.


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: NTGR is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: NTGR's weekly volatility (7%) has been stable over the past year.


Market Performance


7 Day Return

-1.8%

NTGR

0.3%

US Communications

1.4%

US Market


1 Year Return

43.3%

NTGR

-1.7%

US Communications

22.6%

US Market

Return vs Industry: NTGR exceeded the US Communications industry which returned -1.5% over the past year.

Return vs Market: NTGR exceeded the US Market which returned 22.8% over the past year.


Shareholder returns

NTGRIndustryMarket
7 Day-1.8%0.3%1.4%
30 Day0.08%3.8%4.9%
90 Day11.2%20.0%14.6%
1 Year43.3%43.3%1.1%-1.7%25.4%22.6%
3 Year-11.1%-44.8%16.6%8.3%46.8%37.0%
5 Year70.6%5.8%106.1%82.5%132.0%106.1%

Long-Term 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

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: NTGR ($38.69) is trading below our estimate of fair value ($242.87)

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


Price To Earnings Ratio

PE vs Industry: NTGR is good value based on its PE Ratio (42.9x) compared to the US Communications industry average (45.9x).

PE vs Market: NTGR is poor value based on its PE Ratio (42.9x) compared to the US market (21.1x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate NTGR's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: NTGR is good value based on its PB Ratio (1.8x) compared to the US Communications industry average (2.8x).


Next Steps

Future Growth

How is NETGEAR forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

5.7%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if NTGR's forecast earnings growth is above the savings rate (2%).

Earnings vs Market: Insufficient data to determine if NTGR's earnings are forecast to grow faster than the US market

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

Revenue vs Market: NTGR's revenue (5.7% per year) is forecast to grow slower than the US market (10.5% per year).

High Growth Revenue: NTGR's revenue (5.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NTGR's Return on Equity is forecast to be low in 3 years time (14.7%).


Next Steps

Past Performance

How has NETGEAR performed over the past 5 years?

-21.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NTGR has high quality earnings.

Growing Profit Margin: NTGR's current net profit margins (2.4%) are lower than last year (2.5%).


Past Earnings Growth Analysis

Earnings Trend: NTGR has become profitable over the past 5 years, growing earnings by -21.9% per year.

Accelerating Growth: NTGR's earnings growth over the past year (4.7%) exceeds its 5-year average (-21.9% per year).

Earnings vs Industry: NTGR earnings growth over the past year (4.7%) exceeded the Communications industry -0.1%.


Return on Equity

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


Next Steps

Financial Health

How is NETGEAR's financial position?


Financial Position Analysis

Short Term Liabilities: NTGR's short term assets ($822.7M) exceed its short term liabilities ($326.0M).

Long Term Liabilities: NTGR's short term assets ($822.7M) exceed its long term liabilities ($56.0M).


Debt to Equity History and Analysis

Debt Level: NTGR is debt free.

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

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

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


Balance Sheet


Next Steps

Dividend

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


Dividend Yield vs Market

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

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


Stability and Growth of Payments

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

Growing Dividend: Insufficient data to determine if NTGR'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 NTGR's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

  • Explore strong dividend paying companies in the Tech industry.

Management

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

6.4yrs

Average management tenure


CEO

Patrick Lo (63 yo)

18.83yrs

Tenure

US$4,218,152

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 ($USD4.22M) is above average for companies of similar size in the US market ($USD2.39M).

Compensation vs Earnings: Patrick's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
C. Lo
Co-Founder18.83yrsUS$4.22m1.41%
$ 16.5m
Bryan Murray
Chief Financial Officer2.42yrsUS$1.42m0.034%
$ 397.6k
Andrew Kim
Senior VP of Corporate Development7.5yrsUS$1.29m0.088%
$ 1.0m
Michael Werdann
Senior Vice President of Worldwide Sales5.25yrsUS$1.56m0.010%
$ 120.1k
David Henry
Senior Vice President of Connected Home Products5yrsUS$1.27m0.028%
$ 322.4k
Mark Merrill
Co-Founder & CTOno dataUS$275.22k0.045%
$ 526.2k
Michael Falcon
Chief Operations Officer12yrsUS$2.66m0.072%
$ 847.0k
Christopher Genualdi
Director of Investor Relations & Corporate Developmentno datano datano data
Heidi Cormack
Senior Vice President of Global Marketingno datano data0.026%
$ 306.8k
Tamesa Rogers
Senior Vice President of Human Resources7.5yrsno data0.12%
$ 1.4m
Matthew McRae
Senior Vice President of Strategyno datano datano data
Vikram Mehta
Senior Vice President of SMB Products & Services1yrno datano data

6.4yrs

Average Tenure

49yo

Average Age

Experienced Management: NTGR's management team is seasoned and experienced (6.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
C. Lo
Co-Founder18.83yrsUS$4.22m1.41%
$ 16.5m
Janice Roberts
Independent Director1.92yrsUS$294.12k0.031%
$ 362.1k
Barbara Scherer
Independent Director9.42yrsUS$274.98k0.066%
$ 775.4k
Jef Graham
Independent Director15.5yrsUS$255.81k0.017%
$ 193.4k
Thomas Waechter
Lead Independent Director2yrsUS$277.81k0.065%
$ 761.3k
Gregory Rossmann
Independent Director18.92yrsUS$262.48k0.067%
$ 784.3k
Laura Durr
Independent Director1yrno data0.0051%
$ 59.8k
Bradley Maiorino
Independent Director2.5yrsUS$272.48k0.035%
$ 415.1k
Sarah Butterfass
Director0.25yrno datano data

2.5yrs

Average Tenure

63.5yo

Average Age

Experienced Board: NTGR's board of directors are not considered experienced ( 2.5 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: Insufficient data to determine if insiders have bought more shares than they have sold 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: NTGR
  • Exchange: NasdaqGS
  • Founded: 1996
  • Industry: Communications Equipment
  • Sector: Tech
  • Market Cap: US$1.172b
  • Shares outstanding: 30.28m
  • 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 and Internet connected products for consumers, businesses, and service providers. It operates in two segments, Connected Home, and Small and Medium B...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/01/21 23:49
End of Day Share Price2021/01/21 00:00
Earnings2020/09/27
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.