Shares of Netgear (NASDAQ:NTGR) sank today, closing down by 4%, after the company reported third-quarter earnings. The stock was down as much as 10% this morning.
Revenue in the third quarter increased 42% to $378.1 million, which was well above the consensus estimate of $313.5 million in sales. That translated into adjusted net income of $34.7 million, or $1.13 per share, crushing the $0.66 per share in adjusted profits that analysts were modeling for. The networking technology company has seen demand for wireless routers and other equipment rise as consumers upgrade home networks while spending more time at home during the coronavirus pandemic.
"As the pandemic persists, it is clear that families are adapting their lives to accommodate the need to pursue more of their daily activities virtually from home," CEO Patrick Lo said in a statement. "This 'more from home' transition is stretching well beyond work and school to include movie premieres, doctor visits, grocery shopping, fitness classes, and visiting loved ones, and they now all require a whole home, fast and reliable Wi-Fi connection."
Following the results, several analysts have adjusted price targets:
- Raymond James: Maintains outperform rating, increases price target to $43.
- Cowen: Maintains market perform rating, raises price target from $35 to $43.
- Deutsche Bank: Maintains hold rating, boosts price target from $32 to $39.
Netgear declined to provide financial guidance for the fourth quarter due to ongoing macroeconomic uncertainties related to the coronavirus pandemic, which is impacting many of the company's major markets. There is also an increased risk of supply chain disruptions right now.