netgear (NTGR) – Get Report Shares plunged Thursday as analysts reacted negatively after the broadband equipment maker released weaker-than-expected second-quarter results.
Revenue was $308.8 million, lagging the Bloomberg analyst consensus of $314.8 million. Adjusted earnings were 66 cents per share, lagging analysts’ estimates of 71 cents.
Netgear was trading at $31.70, down 14% in premarket trading. It is down 4% in the six months to Wednesday.
Cowen analysts lowered their price target from $45 to $40, but kept the market performance rating.
Weakening sales growth is pushing margins and profits, Cowen analysts wrote. The earnings results “raise questions about the strength of the WiFi 6 upgrade cycle” and show that supply chain issues are still an issue, they said.
Raymond James lowered his price target from $48 to $42, maintaining an outperform rating.
“This is a pretty weak report (supply chain constraints along with signs of declining end-market demand) and represents one of the biggest black-eyes for technology so far this season,” analysts Raymond James wrote.
But they are still optimistic about the company, because of its valuation and balance sheet strength.