Logitech steering towards sales and margin rebound - analyst
Published: 07:35 23 Jan 2024 EST
Despite a muted market reaction to Logitech International’s third-quarter results, equities analysts at Wedbush have reacted positively to the consumer technology group’s robust cash position.
A key factor behind Logitech's performance was its streamlined cost structure, coupled with lower promotional activity compared to the previous holiday season.
These strategic moves helped the company generate a free cash flow of $2.74 per share, the best result since March 2021.
Furthermore, Wedbush noted that Logitech concluded the quarter with a strong cash position of $9 per share and no debt, underlining its financial health.
Analysts pointed to the 4% growth in constant currency sales in the Americas, driven primarily by the rebound in the high-margin video collaboration segment, which partially offset declining EMEA and APAC sales (even though inventory levels showed improvement).
“Logitech is well-positioned to gain further market share amid long-term expansion in PC peripherals and video conferencing while benefitting from long-term growth in global gaming,” said Wedbush, adding: “Logitech’s new guidance suggests that sales will continue to rebound and margins improve.”
Despite the optimistic comments, Wedbush remains 'neutral' on Logitech stock, with a 12-month price target of $90 compared to a $96 publication price.
