Netgear (NTGR) stock was up over 12% in pre-market trading on Thursday after the company’s 2Q earnings and revenues topped analysts’ expectations and registered strong year-over-year growth. Its adjusted earnings jumped 93% year-over-year to $0.54 per share and beat analysts’ estimates of $0.22 by a big margin.
Its revenues jumped 21.3% year-over-year to $280.1 million and came way ahead of the Street estimates of $235.3 million. Netgear’s strong 2Q results reflect increased demand for networking equipment as an increasing number of people are working from home amid the pandemic.
Chairman and CEO of NETGEAR, Patrick Lo noted that “the surge in demand that began in March continued throughout the entire quarter.” He further added, “The work-from-home transition taking place worldwide is driving the adoption of high-performance WiFi at home as an indispensable necessity and, as the leader in WiFi 6 technology, we stand well-positioned to enable this new reality.”
Netgear’s paid subscriber base grew 28% sequentially. The company now anticipates exceeding its target of doubling the subscriber count in 2020. Nonetheless, the networking equipment company didn’t provide an outlook for 3Q citing uncertainty over re-openings and economic recovery, and a new wave of coronavirus cases.
Overall, the majority of analysts are sidelined on the stock with a Hold Street consensus. With its shares up 21.5% this year, the average target price of $25 implies a 16% downside in the coming 12 months (See NTGR stock analysis on TipRanks).