NETGEAR (NasdaqGS:NTGR) Q3 Earnings: What Can You Expect?


NETGEAR, Inc. (NasdaqGS:NTGR) is scheduled to report Q3 earnings results after markets close for trading on October 21, 2020.

The company is expected to report earnings of $0.66/share on revenue of $313.5 million. The consensus earnings per share (EPS) of $0.66/share is based on a poll of 4 analysts and represents a growth in eps of 1.1% over the same quarter last year, when the company reported earnings of $0.65/share.

The revenue forecast of $313.5 million based on a poll of 4 analysts implies a year-over-year (YoY) growth in revenue of 17.9%. Last year the company reported $265.9 million in revenue for the quarter.

Expected to report EPS growth of 1.1% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $313.51 $265.86 17.9%
EPS $0.66 $0.65 1.1%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.

What are your expectations from NETGEAR, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.22 $0.54 140.5% Beat
Q1, 2020 $0.18 $0.21 18.6% Beat
Q4, 2019 $0.29 $0.34 15.6% Beat
Q3, 2019 $0.60 $0.65 7.4% Beat
Q2, 2019 $0.25 $0.28 12.0% Beat
Q1, 2019 $0.49 $0.60 22.7% Beat
Q4, 2018 $0.33 $0.68 103.6% Beat
Q3, 2018 $0.47 $0.76 62.3% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 28, 2020, the stock price reacted by increasing 5.4%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 22, 2020 $30.17 $31.79 5.4% Increase
April 22, 2020 $23.53 $21.66 −7.9% Decline
February 5, 2020 $25.84 $24.79 −4.1% Decline
October 23, 2019 $31.95 $26.03 −18.5% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.75, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.75 implies a 0.3% chance of earnings manipulation.

Fundamentals And Technical Analysis

NETGEAR, Inc. is currently trading at $34.22/share, up 2.6% for the day. The company is trading at approximately 96.5% of its 52-week high of $34.93/share. The company’s stock price is up 7.6% since the last earnings report and up 1.2% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 58.88 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.

NasdaqGS:NTGR Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 73.26 and a forward P/E multiple of 15.72.

NETGEAR, Inc.’s current share price also implies a price-to-book (P/B) multiple of 1.68. The following table summarizes some other key fundamental ratios:

Data as of October 19, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 28, 2020
Stock Price (Current) $34.22
P/E Ratio 73.3x
P/E Ratio (Fwd) 15.7x
PEG Ratio 0.3
Total Debt / Total Capital 3.5%
Levered Free Cash Flow $107.2 million
EV / EBITDA 18.6x


NETGEAR, Inc. is a small-cap stock with a market capitalization of $997.3 million and a total enterprise value of $775.4 million. The company operates in the Information Technology sector and the Communications Equipment industry.

NETGEAR, Inc. designs, develops, and markets networking and Internet connected products for consumers, businesses, and service providers. It operates in two segments, Connected Home, and Small and Medium Business. The company offers smart home/connected home/broadband access products, such as broadband modems, WiFi gateways, WiFi hotspots, WiFi routers and home WiFi systems, WiFi range extenders, Powerline adapters and bridges, WiFi network adapters, and digital canvasses; and value added service offerings, including technical support, parental controls, and cybersecurity protection. It also provides Ethernet switches, wireless controllers and access points, unified storage products, and Internet security appliances for small and medium-sized businesses. The company markets and sells its products through traditional retailers, online retailers, wholesale distributors, direct market resellers, value-added resellers, and broadband service providers in the Americas, Europe, the Middle-East, Africa, and the Asia Pacific. NETGEAR, Inc. was founded in 1996 and is headquartered in San Jose, California.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at or at +1 (516) 778-6257.

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