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Logitech (LOGI) Up 2.5% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Logitech (LOGI - Free Report) . Shares have added about 2.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Logitech due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Logitech Q1 Earnings and Revenues Surpass Estimates
Logitech started fiscal 2025 on a strong note by reporting better-than-expected results for the first quarter. The computer peripheral and software maker’s key metrics, including revenues and earnings, marked strong improvement on a year-over-year basis as well.
Logitech’s fiscal first-quarter non-GAAP earnings of $1.13 per share beat the Zacks Consensus Estimate of 89 cents and registered a year-over-year increase of 74%. The company’s bottom-line results mainly benefited from increased revenues and lower product costs and promotional costs, leading to gross margin expansion.
Logitech’s first-quarter revenues of $1.1 billion outpaced the consensus mark of $1.03 billion. Moreover, the top line marked a year-over-year increase of 12% on a reported basis and 13% on a constant-currency basis, mainly driven by higher demand across key product categories and efficient inventory management.
Segment Details
Logitech registered sales growth across the majority of key product categories year over year. In the first quarter of fiscal 2024, LOGI reclassified its product segments by removing the Audio & Wearable and Mobile Speakers categories and adding Headsets and Other categories.
Revenues from Keyboards & Combos improved 19% year over year to $215.3 million, while Gaming revenues increased 16% year over year to $309.5 million. Our model estimates for Keyboards & Combos and Gaming sales were pegged at $190.7 million and $281.7 million, respectively.
Revenues from the Headsets product category jumped 20% to $44.2 million, Pointing Devices grew 9% to $190 million, Tablet Accessories increased 12% to $78.5 million and Video Collaboration increased 6% to $147 million. Our model estimates for Headsets, Pointing Devices, Tablet Accessories and Video Collaboration were pegged at $37.8 million, $183.3 million, $74.8 million and $145.9 million, respectively.
On the other hand, Webcams declined 3% to $73 million and the Other category’s revenues fell 1% to $30.7 million. Our estimates for Logitech’s Webcams and Other category’s first-quarter revenues were pegged at $77.1 million and $31.8 million, respectively.
Margins & Operating Metrics
The non-GAAP gross profit jumped 24.1% to $466.3 million from $375.6 million reported in the year-ago quarter. The non-GAAP gross margin expanded 430 basis points (bps) from the prior-year quarter to 43.3%. The year-over-year increase was driven by lower product costs and reduced promotional activities.
Non-GAAP operating expenses increased 6.6% to $289 million. As a percentage of revenues, non-GAAP operating expenses declined 130 bps to 26.6%.
The non-GAAP operating income surged 67% to $182 million from $109 million reported in the year-ago quarter. The operating margin improved 560 bps to 16.8% from 11.2% in the year-ago quarter. The increase in the operating margin was mainly driven by improved gross margins, strong executions in operations and lowered spendings on promotional activities.
Liquidity and Shareholder Return
As of Jun 30, 2024, LOGI’s cash and cash equivalents were $1.53 billion, up from $1.52 billion recorded in the previous quarter. Additionally, the company generated $176 million in cash from operational activities in the first quarter of fiscal 2025.
In the first quarter, the company repurchased shares worth $131 million but did not pay out dividends.
Raised Fiscal 2025 Guidance
Buoyed by stronger-than-expected first-quarter performance, Logitech raised its guidance for fiscal 2025. It now expects fiscal 2025 sales in the band of $4.34-$4.43 billion, up from the previous guidance of $4.3-$4.4 billion. The revised top-line projection reflects a year-over-year increase in the band of 1-3%, up from the earlier range of 0-2%.
Logitech also revised its projections of non-GAAP operating profit to $700-$730 million, up from the previous guidance of $685-$715 million. The updated guidance for operating income projects year-over-year growth of 0-4%, up from the previous guidance between a decline of 2% and an increase of 2%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
At this time, Logitech has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Logitech has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Logitech (LOGI) Up 2.5% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Logitech (LOGI - Free Report) . Shares have added about 2.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Logitech due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Logitech Q1 Earnings and Revenues Surpass Estimates
Logitech started fiscal 2025 on a strong note by reporting better-than-expected results for the first quarter. The computer peripheral and software maker’s key metrics, including revenues and earnings, marked strong improvement on a year-over-year basis as well.
Logitech’s fiscal first-quarter non-GAAP earnings of $1.13 per share beat the Zacks Consensus Estimate of 89 cents and registered a year-over-year increase of 74%. The company’s bottom-line results mainly benefited from increased revenues and lower product costs and promotional costs, leading to gross margin expansion.
Logitech’s first-quarter revenues of $1.1 billion outpaced the consensus mark of $1.03 billion. Moreover, the top line marked a year-over-year increase of 12% on a reported basis and 13% on a constant-currency basis, mainly driven by higher demand across key product categories and efficient inventory management.
Segment Details
Logitech registered sales growth across the majority of key product categories year over year. In the first quarter of fiscal 2024, LOGI reclassified its product segments by removing the Audio & Wearable and Mobile Speakers categories and adding Headsets and Other categories.
Revenues from Keyboards & Combos improved 19% year over year to $215.3 million, while Gaming revenues increased 16% year over year to $309.5 million. Our model estimates for Keyboards & Combos and Gaming sales were pegged at $190.7 million and $281.7 million, respectively.
Revenues from the Headsets product category jumped 20% to $44.2 million, Pointing Devices grew 9% to $190 million, Tablet Accessories increased 12% to $78.5 million and Video Collaboration increased 6% to $147 million. Our model estimates for Headsets, Pointing Devices, Tablet Accessories and Video Collaboration were pegged at $37.8 million, $183.3 million, $74.8 million and $145.9 million, respectively.
On the other hand, Webcams declined 3% to $73 million and the Other category’s revenues fell 1% to $30.7 million. Our estimates for Logitech’s Webcams and Other category’s first-quarter revenues were pegged at $77.1 million and $31.8 million, respectively.
Margins & Operating Metrics
The non-GAAP gross profit jumped 24.1% to $466.3 million from $375.6 million reported in the year-ago quarter. The non-GAAP gross margin expanded 430 basis points (bps) from the prior-year quarter to 43.3%. The year-over-year increase was driven by lower product costs and reduced promotional activities.
Non-GAAP operating expenses increased 6.6% to $289 million. As a percentage of revenues, non-GAAP operating expenses declined 130 bps to 26.6%.
The non-GAAP operating income surged 67% to $182 million from $109 million reported in the year-ago quarter. The operating margin improved 560 bps to 16.8% from 11.2% in the year-ago quarter. The increase in the operating margin was mainly driven by improved gross margins, strong executions in operations and lowered spendings on promotional activities.
Liquidity and Shareholder Return
As of Jun 30, 2024, LOGI’s cash and cash equivalents were $1.53 billion, up from $1.52 billion recorded in the previous quarter. Additionally, the company generated $176 million in cash from operational activities in the first quarter of fiscal 2025.
In the first quarter, the company repurchased shares worth $131 million but did not pay out dividends.
Raised Fiscal 2025 Guidance
Buoyed by stronger-than-expected first-quarter performance, Logitech raised its guidance for fiscal 2025. It now expects fiscal 2025 sales in the band of $4.34-$4.43 billion, up from the previous guidance of $4.3-$4.4 billion. The revised top-line projection reflects a year-over-year increase in the band of 1-3%, up from the earlier range of 0-2%.
Logitech also revised its projections of non-GAAP operating profit to $700-$730 million, up from the previous guidance of $685-$715 million. The updated guidance for operating income projects year-over-year growth of 0-4%, up from the previous guidance between a decline of 2% and an increase of 2%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
At this time, Logitech has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Logitech has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.