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NETGEAR Hits 52-Week High, Expanding Portfolio Key Catalyst

Shares of NETGEAR Inc. NTGR rallied to a new 52-week high of $65.55, eventually closing a tad lower at $65.40 on Jan 12.

The stock has returned 18.3% in the past year, underperforming the industry’s rally of 34.1%. However, NETGEAR’s expanding product portfolio and dominant position in the consumer WiFi market is expected to boost top-line growth and profitability. This will eventually help the stock rebound in 2018.

Moreover, the Zacks Consensus Estimate for fiscal 2018 earnings has increased 6 cents to $2.93 over the last 30 days. The figure reflects year-over-year growth of 8.7%.

The Zacks Consensus Estimate for fiscal 2018 sales is currently pegged at $1.56 billion, reflecting year-over-year growth of 11.8%.

NETGEAR carries a Zacks Rank #2 (Buy) and has a market capital of $1.70 billion.

Expanding Product Portfolio: Key Catalyst

Recently, at Consumer Electronics Show (CES) 2018, NETGEAR launched Nighthawk Pro Gaming WiFi Router (XR500) and Nighthawk Pro Gaming SX10 10G/Multi-Gig LAN Switch (GS810EMX).

The company also launched NETGEAR Armor powered by Bitdefender, a security solution that runs on NETGEAR routers and connected devices to actively detect and protect from cyber threats.

NETGEAR also announced that Arlo Baby Smart HD Monitoring Camera (ABC1000A) will be compatible with Apple HomeKit later this quarter.

Last quarter, the company launched Nighthawk X6S and Orbi Pro solutions with the patented FastLane3 technology. NETGEAR also launched the Arlo Pro 2 featuring higher-quality video with 1080p HD optional 24/7 continuous video recording and activities on monitoring. The device also supports Amazon’s Alexa.

NETGEAR also expanded product offerings in the Switch category by introducing 24-Port Gigabit PoE+ Smart Managed Pro Switch, 48-port Gigabit Smart Managed Plus Switch (GS750E) and 12-Port 10-Gigabit Ethernet Smart Managed Pro Switch (XS712Tv2).

Recently, the company expanded its family of 5-speed Multi-Gigabit switching products, which operate at 100Mbps, 1Gbps, 2.5Gbps, 5Gbps or 10Gbps.

Moreover, NETGEAR is performing well in the IP camera market. Its launch of "first wire-free, ONVIF compliant IP camera" — FlexPower — is likely to drive growth.

Other Picks

NetApp NTAP, Western Digital Corporation WDC and Broadcom AVGO are some of the stocks worth considering in the broader technology sector. All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for NetApp, Western Digital and Broadcom are currently pegged at 11.34%, 25.06% and 13.75%, respectively.

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