Netgear (NASDAQ:NTGR) is the beneficiary of the Covid-19 driving demand for internet routers. The strong third-quarter suggest the stock is an attractive technology stock to hold.
In Q3, Netgear posted non-GAAP earnings of $1.13. Revenue rose by a solid 42.2% year-on-year to $378.11 million. Cash flow topped $42.9 million from operations. Should liquidity worsen in the months ahead, investors need not worry about Netgear’s financial flexibility.
In its press release, CEO Patrick Lo said the SMB offerings led to strong demand for its mobile hot spots, wireless routers, and mesh systems.
The company did not issue Q4 guidance. CFO Bryan Murray said, "new cases of COVID-19 have reaccelerated across many countries and there is still considerable uncertainty around the effects on many of our major markets. This makes our business difficult to forecast and heightens the risk of supply chain disruption."
Netgear sustained its research and development and sales and marketing efforts. The continued development of its products will help lift sales and grow its market share. At current levels, Netgear could face some profit-taking in the days ahead. And even though valuations are out of favor, the long-term earnings growth is on track to expand.
Hold Netgear stock and consider adding or starting a position if shares dip.
