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Netgear
(NASDAQ:NTGR)
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Rating:57Neutral
Price Target:
$25.00
▼(-1.42% Downside)
Action:Reiterated
Date:08/07/26
NTGR scores mid-range primarily due to weak recent financial performance (sharp TTM revenue contraction, ongoing losses, and negative free cash flow) despite a strong, low-leverage balance sheet. Offsetting this, technicals show modest improving momentum and the earnings call indicates credible progress in higher-margin enterprise/recurring revenue, though near-term guidance still reflects margin headwinds and ongoing weakness in consumer and service-provider segments.
Positive Factors
Enterprise revenue growth & high margins
Enterprise now exceeds half of revenue and produces outsized gross margins, shifting company mix toward higher‑margin, less promotional sales. A sustained enterprise orientation improves margin durability, pricing power, and resilience to consumer retail pressure over the next several quarters.
Negative Factors
Sharp TTM revenue decline and negative profitability
A large multi‑quarter revenue contraction erodes scale and fixed cost absorption, making it harder to sustain operating margins. If revenue decline persists, the company may struggle to fund R&D and sales investments needed for enterprise expansion and margin recovery.
Read all positive and negative factors
Positive Factors
Negative Factors
Enterprise revenue growth & high margins
Enterprise now exceeds half of revenue and produces outsized gross margins, shifting company mix toward higher‑margin, less promotional sales. A sustained enterprise orientation improves margin durability, pricing power, and resilience to consumer retail pressure over the next several quarters.
Read all positive factors
Netgear (NTGR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$643.33M
Dividend YieldN/A
Average Volume (3M)357.69K
Price to Earnings (P/E)―
Beta (1Y)1.74
Revenue Growth-0.70%
EPS Growth-141.66%
CountryUS
Employees784
SectorTechnology
Sector Strength88
IndustryCommunication Equipment
Share Statistics
EPS (TTM)-1.45
Shares Outstanding27,179,022
10 Day Avg. Volume407,044
30 Day Avg. Volume357,692
Financial Highlights & Ratios
PEG Ratio0.06
Price to Book (P/B)1.42
Price to Sales (P/S)1.02
P/FCF Ratio-37.48
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda>-0.01
Forecast
1Y Price Target
$36.00Price Target Upside41.96% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)0.22
Revenue Forecast (FY)$678.25M
Netgear Business Overview & Revenue Model
Company Description
NETGEAR, Inc. specializes in the conceptualization, engineering, and distribution of a broad spectrum of networking and internet-enabled devices. The company caters to a diverse clientele, encompassing individual consumers, corporate entities, and...
How the Company Makes Money
NETGEAR makes money primarily by selling networking hardware and, to a lesser extent, by selling software and services tied to that hardware. Its largest revenue stream is product revenue from consumer and small/medium business networking devices ...
Netgear Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 28, 2026
Earnings Call Sentiment Positive
The call highlighted a clear and accelerating transformation into a higher-margin, enterprise-led company with record enterprise gross margins, contribution margin expansion, ARR growth, successful product/platform launches (Align, Insight) and software insourcing. At the same time, near-term headwinds remain: overall revenue modestly down YoY, consumer and service-provider revenue declines, memory/supply-chain cost pressures (200 bps H2 headwind skewed to Q3), APAC restructuring drag, and constrained cash flow with negative GAAP margin guidance for Q3. On balance, the strong enterprise performance, margin expansion and strategic progress outweigh the near-term operational and macro-driven challenges.Positive Updates
Enterprise Revenue Growth
Enterprise revenue of $89.0M, up 7.7% year-over-year and up 6.1% sequentially; enterprise now represents >50% of total revenue and ~69% of gross profit, driven by double-digit end-user demand for Pro AV managed switches.
Negative Updates
Overall Revenue Slight Decline
Total revenue of $168.6M, down 1.2% year-over-year despite sequential growth of 6.1%, reflecting headwinds in consumer and service-provider-related products.
Read all updates
Q2-2026 Updates
Positive
Negative
Enterprise Revenue Growth
Enterprise revenue of $89.0M, up 7.7% year-over-year and up 6.1% sequentially; enterprise now represents >50% of total revenue and ~69% of gross profit, driven by double-digit end-user demand for Pro AV managed switches.
Read all positive updates
Company Guidance
For Q3 FY26 NETGEAR guided net revenue of $165 million to $175 million (with service‑provider/related revenue around $22 million, down ~19% y/y), GAAP operating margin of negative 12% to negative 9% and non‑GAAP operating margin of negative 3% to 0%, GAAP tax of $0.5–$1.5 million and non‑GAAP tax of $1–$2 million. Management expects a roughly 200‑basis‑point headwind to combined gross margin in H2 versus H1 (skewed to Q3) driven by memory and supply constraints, with memory impact described as nominal in enterprise but larger in consumer and some near‑term air‑freight costs. The outlook is underpinned by recent Q2 results (revenue $168.6M; enterprise revenue $89M, +7.7% y/y; enterprise ~53% of revenue; Q2 non‑GAAP gross margin 41.4% and enterprise gross margin 54.1%; ARR $41.6M, +15% y/y; 558k subscribers), and management said they expect about a 400‑basis‑point sequential improvement in non‑GAAP operating margin in Q4 versus the Q3 midpoint.Netgear Financial Statement Overview
Summary
Income Statement
28
Negative
Balance Sheet
72
Positive
Cash Flow
34
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 688.14M | 693.35M | 673.76M | 740.84M | 932.47M | 1.17B |
| Gross Profit | 262.74M | 250.96M | 195.93M | 249.25M | 250.55M | 365.84M |
| EBITDA | -16.75M | -17.53M | -65.80M | -25.04M | -23.82M | 79.41M |
| Net Income | -40.67M | -32.84M | 12.36M | -104.77M | -68.99M | 49.39M |
Balance Sheet | ||||||
| Total Assets | 788.70M | 836.27M | 850.23M | 847.14M | 1.02B | 1.08B |
| Cash, Cash Equivalents and Short-Term Investments | 267.88M | 323.04M | 408.69M | 283.65M | 227.43M | 271.52M |
| Total Debt | 45.81M | 50.95M | 30.63M | 41.57M | 45.10M | 27.79M |
| Total Liabilities | 332.28M | 338.45M | 309.16M | 311.65M | 398.93M | 381.72M |
| Stockholders Equity | 456.43M | 497.82M | 541.07M | 535.50M | 620.86M | 696.82M |
Cash Flow | ||||||
| Free Cash Flow | -19.43M | -18.91M | 155.80M | 51.05M | -19.49M | -14.44M |
| Operating Cash Flow | 5.25M | 1.61M | 164.80M | 56.85M | -13.73M | -4.58M |
| Investing Cash Flow | 4.75M | -22.64M | -26.16M | -27.43M | -79.52M | -9.98M |
| Financing Cash Flow | -103.16M | -55.51M | -28.91M | 797.00K | -24.02M | -68.12M |
Netgear Technical Analysis
Negative
25.36
Price Trends
23.80
Negative
24.18
Negative
24.26
Negative
Market Momentum
0.09
Positive
44.59
Neutral
34.76
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTGR, the sentiment is Negative. The current price of 25.36 is above the 20-day moving average (MA) of 23.82, above the 50-day MA of 23.80, and above the 200-day MA of 24.26, indicating a bearish trend. The MACD of 0.09 indicates Positive momentum. The RSI at 44.59 is Neutral, neither overbought nor oversold. The STOCH value of 34.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NTGR.
Netgear Risk Analysis
Netgear disclosed 39 risk factors in its most recent earnings report. Netgear reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Netgear Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $3.10B | 63.65 | 7.39% | ― | 20.26% | 11.95% | |
68 Neutral | $3.13B | 73.40 | 50.74% | ― | 12.59% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $1.28B | -31.35 | -10.31% | ― | -27.47% | -181.91% | |
57 Neutral | $643.33M | -15.92 | -8.42% | ― | -0.70% | -141.66% | |
56 Neutral | $273.28M | 36.67 | 3.37% | ― | 0.23% | ― | |
46 Neutral | $616.00M | -24.02 | -18.82% | ― | 15.75% | 78.71% |
* Technology Sector Average
NTGR
Netgear
23.08
-2.14
-8.49%
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EXTR
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Netgear Corporate Events
Business Operations and StrategyExecutive/Board ChangesStock BuybackFinancial DisclosuresRegulatory Filings and Compliance
Netgear appoints Douglas Murray to board, advances enterprise shift
Neutral
Aug 6, 2026
For the second quarter ended June 28, 2026, NETGEAR reported net revenue of $168.6 million, down 1.2% year over year, but delivered higher profitability, with GAAP gross margin rising to 40.2% and non-GAAP gross margin to 41.4%, driven largely by ...
Executive/Board ChangesShareholder Meetings
Netgear Shareholders Approve Directors, Auditor and Pay Plan
Positive
Jun 2, 2026
On May 28, 2026, Netgear, Inc. held its 2026 Annual Meeting of Stockholders virtually, with 22,948,062 shares represented, constituting a quorum, and stockholders voting on the election of six directors, ratification of the independent auditor, an...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.