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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Netgear, Inc. (XNAS:NTGR) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
NTGR
Name:
NETGEAR, INC. (XNAS:NTGR)
Sector:
337.00K
Industry:
Communication Equipment
CEO:
Mr. Patrick Lo
Total Employees:
771
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 1952.75% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF NETGEAR, INC.(NTGR) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND COMMUNICATION EQUIPMENT INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
23.05
One Month Price Target:
$23.18
Six Month Price Target :
$23.82
Likely Price in One Year's Time:
Ticker:
$24.58
Likely Trading Range Today Under (Normal Volatility)
$22.95
Price Upper limit ($) :
$23.17
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$21.7
This week:
$20.03
This month :
$17.01
Other Primary facts
Market Cap:
649.10M
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
28.73M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
22.57%
-16.76%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$29.32
$26.45
$16.78
$19.65
Medium risk (<10%) entry points
Buy Call
Sell Call
$25.52
Buy Put:
Sell Put:
$24.91
$20.57
$21.19
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
NTGR
Sharpe Ratio:
0.89%
Comparison:
NTGR, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -31.70% lower than the industry
& is -61.15% lower than the market/S&P 500 average
Average Returns/Yield of
NTGR
Daily returns:
0.03%
Weekly returns:
0.17%
Monthly returns:
0.69%
Yearly returns:
12.89%
Comparison of returns:
Average annual returns/yield (last 3 years) is -36.16% below industry average
Classification:
NTGR, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.42
Statistical test of Returns:
NTGR has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.87%
Weekly Volatility:
6.42%
Monthly Volatility:
12.84%
Yearly Volatility:
44.48%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.77%
Volatility in last five trading days has been -73.34% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.86%
Weekly VaR:
-13.11%
Monthly VaR:
-26.22%
How Much Can the price of
NTGR
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-23%
Worst case (decline):
-90.83%
This translates to price declining to:
$17.80
This translates to price declining to:
$2.11
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
NTGR is a 85.06% riskier investment compared to the market/S&P 500 & is 58.54% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -9.38% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
NTGR
Beta in relation to market/S&P 500--0.99
Expected beta in 1 year's time:
0.561
Expected beta in 3 year's time:
0.794
Unlevered (debt free) Beta:
0.924
Beta in relation to Nasdaq (XNAS):
0.798
Beta in relation to all global stocks::
0.558
Beta Comparison & Analysis
Beta of competitors/peers::
1.197
Beta is -17.26% lower than peers
Average Industry Beta:
1.197
Beta is -17.30% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
6.92%
Sustainable growth rate is -84.84% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.017
Alpha is -211.19% below industry average alpha yield
Alpha is -109% below the market average
Analysis of Cost of Capital of
NTGR
Equity cost of capital:
0.099
Equity cost of capital is -12.50% below industry mean WACC
Unlevered (without debt) cost of capital:
9.27%
Before-tax cost of debt:
-
After-tax cost of debt:
-
Overall debt rating:
-
Weighted average cost of capital (WACC):
-
-
Key Per-Share Metrics & Analysis
Revenue per share:
$36.91
Revenue growth rate per share of (3Y):
1.04
Annual revenue growth rate is 8.97% above the industry average
EPS:
-$1.10
Expected Annual growth rate of EPS (3Y):
24.20%
Expected future EPS growth rate is 51.15% higher than the Communication Equipment industry
Free cash flow (FCF) per share:
-
-
-
Debt per share
$1.28
EBITDA per share
-$0.44
Valuation Analysis Today of
NTGR
P/E Ratio:
13.77
P/E Ratio of Competitors/Peers:
167.91
P/E ratio is -91.80% lower than main peers & is -62.90% lower than the industry
-
NTGR is -156.44% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
0.62
Price to sales ratio is -72.73% below the industry mean
P/B (Price to book value ratio):
1.04
-
-
Net income growth rate (3Y):
-663.73%
Net income growth rate is -245.58% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
5.79%
Net debt to equity ratio:
-25.26%
Debt to assets ratio:
3.64%
Net debt to assets ratio:
-15.87%
Debt-to-asset ratio is -93.43% below industry average
Ability to repay debt:
Interest coverage ratio:
-
-
Looking forward:
Debt growth rate:
-28.39%
Annual debt growth is 180% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.486
Statistical significance of correlation:
NTGR has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.552
Stock price is -11.97% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.552
Correlation of price movement with Nasdaq (^IXIC):
-0.058
Covariance of price movement with the market:
-0.097
Kurtosis
9.611
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.365
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
NTGR
Gross Profit Margin Ratio:
118%
Operating Profit Margin Ratio:
-2.19%
Operating profit margin is -134.13% lower than the industry
Net Profit Margin Ratio:
118%
Effective Tax Rate:
-24.14%
Effective tax rate is -186.50% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-4.83%
Return on equity (ROE) is -113.91% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-3.04%
Return on assets (ROA) is -169.52% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
2.64
Current ratio is 18.63% above industry average
Cash Conversion Cycle (days):
83.5
Cash conversion cycle is 33.39% above industry average
The remaining useful life of property plant & equipment is: -5.9 years
Stock based compensation to net income ratio:
-15.26%
In-depth Efficiency Analysis
Revenue generated per employee:
1.4M
Each employee generates 150% more revenue than industry average revenue per employee
EBITDA generated per employee:
- 16.5K
Each employee generates -122% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 39.9K
Each employee generates -262% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
0.4K
Each employee generates -128% less free cash flow than industry average revenue per employee
Assets/Capital per employee
228.2K
Each employee generates -128% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 4.71%
Growth rate in R&D investment/expenditure is -303.41% lower than the industry
Competitors/Peer firms of
NTGR
VUZIX CORPORATION (XNAS:VUZI)
CEVA, INC (XNAS:CEVA)
ChipMOS TECHNOLOGIES INC. (XNAS:IMOS)
SIMULATIONS PLUS, INC. (XNAS:SLP)
GREENSKY, INC. (XNAS:GSKY)
KAROOOOO LTD. (XNAS:KARO)
MTSC
VEECO INSTRUMENTS INC. (XNAS:VECO)
SMART GLOBAL HOLDINGS, INC. (XNAS:SGH)
Current Analyst Ratings
Strong buy�4%
Buy�4%
Hold�4%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
4/3/22
Revenue:
1.06B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
746.91M
313.80M
92.96M
57.86M
201.59M
143.73M
- 1915.00K
292.63M
3.00K
-
12.05M
- 12746.00K
- 23275.00K
- 30783.00K
- 24798.00K
5.99M
- 30783.00K
Statement of Cash Flow
Date:
Period:
2.81M
Differed Income Tax :
- 7626.00K
Stock Based Compensation :
4.70M
Change in Working Capital :
12.10M
Accounts Receivables:
41.25M
Other Working Capital:
- 2038.00K
Other Non-Cash Items:
46.52M
Net Cash Provided by Operating Activities:
1.29M
Investments in PP&E:
- 957.00K
Net Acquisitions:
-
Purchases of Investments:
- 50412.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
4/3/22
2022
Q1
206.83M
56.96M
263.79M
219.91M
327.31M
27.13M
838.14M
54.00M
36.28M
1.72M
7.58M
71.42M
4.92M
175.91M
-
1.01B
64.80M
9.03M
1.64M
17.86M
225.83M
317.53M
36.89M
22.61M
59.50M
-
377.02M
29.00K
- 294440.00K
156.0K
-
April 3, 2022 at 6:00:00 AM
1.04B
637.02M
1.01B
64.54M
45.92M
- 160906.0K
417.00K
-
- 50952.00K
-
-
- 10639.00K
-
3.35M
- 7288.00K
-
- 56946.00K
206.83M
263.77M
1.29M
- 957.00K
337.00K
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
NTGR
2023
2024
2025
2026
2027
$24.66
$26.30
$28.05
$29.91
$31.90