What happened
Shares of Logitech International (LOGI 0.51%) were up 12% as of 12:13 p.m. ET on Tuesday after the company reported earnings results for the fiscal second quarter ending Sept. 30. Sales and earnings were down again, continuing the weak trends from earlier in the year.
However, with the stock having fallen 45% year to date through Friday's close, investors are clearly focusing on the value underneath the shares instead of weak sales trends.
So what
The leading brand of gaming peripherals continued to suffer through a challenging economic backdrop. Revenue decreased by 12% year over year, with earnings per share down 38%. The results look stronger than the broader PC market, where shipments fell 15% in the last quarter.
Logitech reported mixed results across product categories, with growth in video collaboration offset by big declines in sales of webcams and other accessories.
Still, the company is the leading computer peripherals brand serving markets -- namely, videoconferencing and gaming -- that are riding long-term growth trends. What counts right now is that Logitech is outperforming the industry and gaining market share.
Now what
Logitech guided for a revenue decrease of 8% for fiscal 2023, or 4% on a constant currency basis. The consensus analyst estimate has the company reporting $5.31 billion in adjusted revenue for the current fiscal year. However, Logitech's guidance would put adjusted revenue at $5.26 billion.
Perhaps the market was looking for much worse, given the severe contraction in the broader PC market this year. Inflation and other economic challenges could weigh on consumer spending in the near term, so investors shouldn't expect a quick turnaround. But the stock offers value, trading at a low price-to-earnings ratio of 13.8.
