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NETGEAR, Inc.
NETGEAR, Inc. (NASDAQ: NTGR) provides consumers, businesses, and service providers with high-performance networking technology and internet-connected products. Its two operating segments are 1) Connected Home, which offers Wi-Fi internet networking services such as Wi-Fi mesh systems, routers, intelligent devices, subscription services, and so on, and 2) Small and Medium Businesses (SMB), which provides low-cost business networking, LAN, security, and cloud-based services.
Why should Investors make an Exit?
Valuation Methodology: Price/Earnings Per Share Multiple Based Relative Valuation
(Analysis by Kalkine Group)
* % Premium/(Discount) is based on our assessment of the company's FY1 trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
Stock Recommendation:
NTGR's stock price has been on a bearish trend throughout the year, fallen 42.96% in the past twelve months and is currently leaning towards the lower end of its 52-week range of USD 22.78 to USD 41.96. We have valued the stock using the Price/Earnings-based relative valuation methodology and arrived at a target price of USD 21.50.
Considering the decline in fundamentals, industry lagging margins, long cash conversion cycle, current valuation, and bearish technical indicators, we recommend a "Sell" rating on the stock at the current price of USD 23.03, up 0.43%% as of April 11, 07:55 AM PDT.
3-Year Technical Price Chart (April 11, 2022, at 07:55 AM PDT). Source: REFINITIV, Analysis by Kalkine Group
* The reference data in this report has been partly sourced from REFINITIV.
* All forecasted figures and industry information have been taken from REFINITIV.