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Logitech's (LOGI) Rally Likely to Continue Further: Here's Why

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Logitech International S.A. LOGI is currently one of the top performing stocks in the technology sector. The stock’s price rally reflects the company’s robust fundamentals. Therefore, if you haven’t taken advantage of the price appreciation yet, it’s time you add the stock to your portfolio now.

The company has performed brilliantly, year to date, and has the potential to carry on the momentum further.

Why an Attractive Pick?

Share-Price Appreciation: Logitech’s price trend reflects that the stock has had an impressive run on the bourse in the year-to-date (YTD) period. Shares of the company have appreciated 31.8% compared with the Zacks Computer - Peripheral Equipment industry’s gain of 16.6% and the S&P 500’s 13.8%.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Solid Rank & Growth Score: Logitech currently carries a Zacks Rank #2 (Buy) and has a Growth Score of A. Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or #2, offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.

Northward Estimate Revisions: Analysts have raised the estimates for fiscal 2022 and fiscal 2023 in the past 60 days, reflecting their confidence in the company. During the same period, the Zacks Consensus Estimate for fiscal 2022 and 2023 moved 30 cents and 28 cents north, respectively.

Positive Earnings Surprise History: Logitech has an impressive earnings surprise history. The company outpaced estimates in all of the trailing four quarters, delivering an outstanding average earnings surprise of 114.3%.

Growth Drivers: This Switzerland-based company is benefiting from strong momentum in the video collaboration, gaming, and creativity & productivity businesses. It has been able to leverage its software and go-to-market capabilities to drive market share gains and growth.

Notably, the company had registered a whopping 117% surge in fourth-quarter fiscal 2021 revenues and 245% jump in non-GAAP earnings per share. The top and bottom lines also surpassed the respective Zacks Consensus Estimate.

Logitech has been gaining from elevated demand for its Video Collaboration tools, mainly driven by the surging work-from-home and learn-from-home trends. Also, the PC peripheral market is witnessing strong traction, which is aiding top-line growth. Additionally, demand for gaming products has shot up on the growing popularity of online video games and eSports amid the stay-at-home scenario.

We believe the thriving cloud-based video conferencing services will continue to be the key catalyst. Rising adoption of new mobile platforms in both mature and emerging markets will further fuel demand for Logitech’s peripherals and accessories. Moreover, partnerships with cloud providers like Zoom Video Communications ZM, Microsoft MSFT and Alphabet GOOGL are major positives for the company.

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Microsoft Corporation (MSFT) : Free Stock Analysis Report

Logitech International S.A. (LOGI) : Free Stock Analysis Report

Alphabet Inc. (GOOGL) : Free Stock Analysis Report

Zoom Video Communications, Inc. (ZM) : Free Stock Analysis Report

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