Shares of Logitech Worldwide (NASDAQ: LOGI) needs to be up at the moment. The corporate’s fiscal Q2 gross sales and earnings — reported Monday — each topped expectations. The maker of laptop peripherals even raised its full-year income steering. That improved gross sales outlook, nonetheless, simply wasn’t improved sufficient to please buyers and the inventory is down 9.5% round 1:10 p.m. ET.
Nitpicky
For the three-month stretch ending in September, Logitech turned $1.12 billion price of income into adjusted per-share earnings of $1.20. Each had been higher than year-ago numbers of $1.06 billion and $1.09 per share. And, each had been higher than analysts’ consensus expectations for a prime line of $1.11 billion and per-share earnings of $1.03.
The stumbling block? Steering for the rest of fiscal 2025. Though the corporate upped its top-line outlook from a variety of $4.34 billion to $4.43 billion to a revised vary of $4.39 billion to $4.47 billion, analysts had been anticipating a mean of $4.51 billion.
This slight shortfall clearly rattled buyers, sending the inventory practically 10% decrease as of mid-day Tuesday.
Alternative knocks
The knee-jerk response is comprehensible, however not precisely cheap.
See, it is not as if Logitech shares had been overextended headed into Monday night’s launch of the corporate’s second-quarter report, and subsequently ripe for profit-taking no matter its outcomes. This inventory’s really been a lackluster performer since January regardless of respectable — even when not thrilling — gross sales and earnings progress that is anticipated to persist at the least via subsequent fiscal 12 months.
It leads one to surprise if this sell-off is extra concerning the broad market’s general bearish motion at the moment somewhat than Logitech itself.
Regardless of the cause, at the moment’s dip is a chance to step into undervalued shares of an underappreciated technology firm. Logitech Worldwide is doing superb. Actually, it reported gross sales progress in practically all product classes final quarter, underscoring the breadth of demand in addition to this model title’s attain.
It is not a progress holding, to be clear. It is a value stock, with lots of the regular worth traits, like constant single-digit progress and a good dividend yield of 1.5%. Buying and selling at 19 instances this 12 months’s anticipated per-share earnings and 18 instances subsequent 12 months’s anticipated backside line, nonetheless, Logitech shares are additionally priced like a price inventory of its ilk.
Should you had been inquisitive about proudly owning it previous to at the moment’s sell-off, the one factor that is actually modified is the inventory’s worth. It is far more enticing now.
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James Brumley has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Logitech Worldwide. The Motley Idiot has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the creator and don’t essentially replicate these of Nasdaq, Inc.
