Logitech Delivers Strong 4Q Performance, Expands Stock Buyback Program To $1B

Aided by strong product demand, Logitech International (LOGI) delivered a strong 4Q performance.

Sales of the computer peripherals and software manufacturer have grown by 117% year-on-year to $1.54 billion, ahead of the consensus estimate by $400 million. Non-GAAP earnings per share came in at $1.45, beating analysts’ estimates by $0.58.

Logitech President and Chief Executive Officer Bracken Darrell said, “Fiscal year 2021 was our best year ever. It has been rewarding to see Logitech’s products play an essential role, enabling work, creation, connection, and entertainment. Our powerful and resilient capabilities allowed us to both deliver remarkable performance in a challenging FY2021 and, at the same time, invest in compelling plans for the future.”

Nate Olmstead, Logitech Chief Financial Officer, added, “The trends that fuelled our growth pre-pandemic – work from anywhere, video everywhere, esports and the democratization of content creation – all accelerated.”

Significantly, Logitech raised its fiscal 2022 guidance. It now expects non-GAAP operating income to be in the range of $800 million to $850 million. Earlier, Logitech expected non-GAAP operating income to range from $750 million to $800 million.

Furthermore, Logitech expanded its stock buyback program to $1 billion from the current $250 million, of which it has already utilized $165 million. This increase takes the total share buyback authorization to $835 million, to be executed by the end of July 2023. (See Logitech stock analysis on TipRanks)

On April 23, Wedbush analyst Michael Pachter reiterated a Hold rating on the stock with a $120 price target (7% upside potential).

Commenting in anticipation of Logitech’s 4Q results, Pachter said, “Logitech has over $1 billion in available cash, no debt, an investor-friendly capital allocation strategy including an expanding dividend and an excellent M&A track record. Logitech’s consistent earnings growth coupled with investor-friendly capital allocation should support a premium valuation.”

Overall, consensus among analysts maintains that Logitech is a Moderate Buy, based on 3 Buys and 2 Holds. The average analyst price target of $126 implies 12.37% upside potential. Shares have gained about 137.3% over the past year.

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