Tag Archives: NASDAQ:LOGI

Logitech Intl: Zacks’ Bull of the Day Play

The tech sector is significantly impacted by corporate spending cycles.  Dependent on the company’s current and near term outlook, management will decide either to purchase new tech items, or wait another quarter or even a year to make the purchases.  Yet one tech company has been able to buck these cycles and post double digit gains in almost every product they sell during a challenging consumer spending environment.  That company is Logitech International (LOGIFree Report) , and they are our Zacks Bull of the Day.

This Zacks Rank #1 (Strong Buy) company designs, manufactures and markets innovative peripherals that provide people with easy access to the digital world. The Company’s product family includes Internet video cameras, mice and trackballs, keyboards, audio and telephony products, interactive gaming devices and 3D controllers.

Recent Earnings Results

Last week Logitech posted Q3 17 earnings results where they easily beat bot the Zacks consensus earnings and revenue estimates.  On a year over year basis, the company saw gains in retail sales +12%, total revenues +7%, GAAP operating income +41%, non-GAAP operating income +34%, and cash flows from operations rose by 55%.  Further, the company saw their mobile speakers, PC gaming, and video collaboration segments grow by more than +20%.  Lastly, from an international perspective, revenues improved by +18% in Europe, +7% in the Americas, and +14% in Asia Pacific.

Management’s Take

According to Bracken Darrell, President and CEO, “This Q3, our results exceeded expectations and were outstanding, with broad-based growth across all our regions and almost all product categories. We delivered both the highest retail revenue and the highest non-GAAP gross margin in Logitech’s 35-year history. Our strategy is working, and we are just at the beginning of our path to deliver what we’re capable of. We have significantly raised our outlook on the back of this performance.”

Due to the impressive quarterly results, management increased their guidance for FY 2017; management expects retail sales to grow between +12% to 13% (above their previous guidance between +8% to +10%), and now expects that non-GAAP operating income in a range of $225 to $230 million (above their previous guidance between $195 to $205 million).

Price and Earnings Consensus Graph

As you can see below, LOGI’s stock price has taken off since the second half of 2016.  Further, you can see that FY 2017 estimates are above their current price.

Logitech International S.A. Price and Consensus

Logitech International S.A. Price and Consensus | Logitech International S.A. Quote

Increasing Estimates

Due to the strong quarter and subsequent raise in guidance, earnings estimates have jumped up for Q4 17, FY 17 and FY 18 over the past 7 days.  Q4 17 improved from $0.09 to $0.12, FY 17 rose from $0.88 to $1.12, and FY 18 jumped up from $1.00 to $1.18.

Bottom Line

Even with a challenging consumer spending environment, Logitech was able to outperform all expectations in Q3 17, and now they expect to do even better next quarter.

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