NEW YORK (TheStreet) -- NetGear Inc. (NTGR - Get Report) had coverage initiated today with a "sector perform" at Pacific Crest Securities, with analysts citing the company's near-term headwinds and a transitional product strategy for its cautious rating.
Shares of NetGear closed yesterday at $31.80.
Separately, TheStreet Ratings team rates NETGEAR INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate NETGEAR INC (NTGR) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, increase in stock price during the past year, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- NTGR has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, NTGR has a quick ratio of 1.86, which demonstrates the ability of the company to cover short-term liquidity needs.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- NETGEAR INC has improved earnings per share by 11.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NETGEAR INC reported lower earnings of $1.42 versus $2.23 in the prior year. This year, the market expects an improvement in earnings ($2.41 versus $1.42).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Communications Equipment industry average. The net income increased by 5.1% when compared to the same quarter one year prior, going from $13.99 million to $14.71 million.
- You can view the full analysis from the report here: NTGR Ratings Report