NetGear Earnings Preview

Motley Fool Staff
Updated

Investors are on the edge of their collective seats, hoping that NetGear (NAS: NTGR) will top analyst expectations for the third consecutive quarter. The company will unveil its latest earnings on Tuesday, Feb. 7. Netgear designs, develops, and markets networking products for home users and for small business.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back NetGear, with five of seven rating it a buy and the remainder rating it a hold. Analysts like NetGear better than competitor Arris Group overall. NetGear's rating hasn't changed over the past three months.

  • Revenue forecasts: On average, analysts predict $307.2 million in revenue this quarter. That would represent a rise of 18.8% from the year-ago quarter.

  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.57 per share. Estimates range from $0.57 to $0.58.

What our community says:
CAPS All-Stars are enthusiastically backing the stock, with 99% granting it an "outperform" rating. Most of the community is in line with the All-Stars, with 96.9% assigning it a rating of "outperform." Fools feel positively about NetGear and haven't been shy with their opinions lately, logging 642 posts in the past 30 days. NetGear has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management:
NetGear's profit has risen year-over-year by an average of 82.2% over the past five quarters.

Now, a look at how efficient management has been at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. NetGear's net margins, which reflect what percentage of revenue becomes profit, have been rising year-over-year for the last four quarters. Here is how NetGear has been doing for the last four quarters:

Quarter

Q3

Q2

Q1

Q4

Gross Margin

31.9%

31.0%

31.5%

31.4%

Operating Margin

11.0%

9.5%

11.0%

9.7%

Net Margin

8.9%

7.1%

7.6%

5.3%

One final thing: If you want to keep tabs on NetGear movements, and for more analysis on the company, make sure you add it to your Watchlist.

Motley Fool newsletter services have recommended buying shares of NetGear.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Earnings estimates provided by Zacks.

At the time thisarticle was published

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Advertisement