Zacks Industry Outlook Logitech, Mercury Systems, Stratasys and TransAct

Industry Overview - The Zacks Computer-Peripheral Equipment industry is facing challenges due to weakening IT spending caused by macroeconomic uncertainties, high inflation, and geopolitical risks [1] - Demand for remote working and online learning-related computer peripherals has declined in the post-pandemic era [1] - The industry comprises companies offering computer input, output, and storage devices, including keyboards, mice, LCD panels, smart glass, 3D printers, and transaction-based printer products [3] - The industry is highly competitive, with companies focusing on innovation to meet current demand trends and strengthen product portfolios [4] Key Trends Shaping the Industry - Shift in consumer preference from mobile gaming to professional gaming experiences, driven by advanced gaming devices and the popularity of e-sports leagues [5] - Growing demand for 3D printing solutions across industries like medical, aerospace, and automotive, driven by engineers, designers, and entrepreneurs [6] - Expansion into price-sensitive regions like Asia Pacific and the Middle East & Africa through low-cost quality products [7] - Delayed PC refresh cycle due to the pandemic-led work-from-home trend, negatively impacting demand for computer peripherals [9] - Elevated operating expenses from R&D and sales force expansion, likely to dent margins in the near term [10] Industry Performance and Valuation - The Zacks Computer-Peripheral Equipment industry has underperformed the S&P 500 and the broader Zacks Computer and Technology sector, plunging 30.4% in the trailing 12 months [14] - The industry is currently trading at a forward 12-month P/S of 0.68X, compared to the S&P 500's 5.46X and the Zacks Computer and Technology sector's 7.02X [15] - The industry carries a Zacks Industry Rank 157, placing it in the bottom 37% of over 250 Zacks industries, indicating dim near-term prospects [11][12] Companies to Watch Stratasys (SSYS) - Manufacturer of 3D printers and rapid prototyping systems for industries like automotive, aerospace, defense, and medical [16] - Benefiting from increased demand for 3D printed equipment, with cost-control initiatives and innovative product introductions driving growth [17][18] - Consensus earnings estimate for 2025 remains unchanged at 33 cents per share, with the stock depreciating 35.6% in the past year [19] Mercury Systems (MRCY) - Provider of sensor and safety-critical mission processing subsystems for aerospace, defense, and intelligence programs [20] - Benefiting from modernization in radar, electronic warfare, and C4I, with a revised upward earnings estimate of 31 cents per share for fiscal 2025 [21][22] - Stock has soared 36.2% in the past 12 months [22] Logitech (LOGI) - Global leader in PC peripherals and digital platforms, with products in PC navigation, gaming, and video security [22] - Experiencing recovery from the post-pandemic downturn, with three consecutive quarters of year-over-year sales growth [23] - Increasing hybrid work trends and partnerships with cloud providers like Zoom and Microsoft are key growth drivers [24] - Consensus earnings estimate for fiscal 2025 remains unchanged at $4.63 per share, with the stock declining 9.1% over the past year [25] TransAct Technologies (TACT) - Manufacturer of transaction-based printers and related products for vertical markets like gaming, financial services, and kiosks [26] - Benefiting from accelerated digital transformation and business automation, with trusted printers for transaction records [27] - Consensus earnings estimate for 2025 remains unchanged at a loss of 17 cents per share, with the stock plunging 41.7% over the past year [28]