Logitech (LOGI) Up 8.3% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Logitech's third-quarter fiscal 2025 results exceeded expectations, leading to an upward revision of its fiscal guidance for the year [2][12]. Financial Performance - Logitech reported non-GAAP earnings of $1.59 per share, surpassing the Zacks Consensus Estimate by 15.2%, with a year-over-year increase of 4% [2]. - Revenues reached $1.34 billion, exceeding the consensus mark by 7.7%, reflecting a 7% increase year-over-year on a reported basis and 6% on a constant currency basis [3]. - Non-GAAP gross profit rose 9% to $579 million, with a gross margin expansion of 90 basis points to 43.2% [8]. Segment Performance - Keyboards & Combos revenues improved 3% to $236.75 million, while Gaming revenues increased 14% to $466.72 million [5]. - Headsets revenues jumped 10% to $45.9 million, Pointing Devices grew 5% to $217 million, Tablet Accessories increased 21% to $77.4 million, and Video Collaboration rose 4% to $176 million [6]. - Webcams declined 2% to $84.4 million, and revenues from the Other category fell 27% to $36 million [7]. Operating Metrics - Non-GAAP operating income grew 7.1% to $265.9 million, with the operating margin remaining flat at 19.8% [9]. - Non-GAAP operating expenses increased 10.6% to $313 million, representing 23.4% of revenues, an increase of 80 basis points [8]. Liquidity and Shareholder Return - As of December 31, 2024, Logitech had cash and cash equivalents of $1.5 billion, up from $1.36 billion in the previous quarter [10]. - The company returned $200 million to shareholders through share repurchase in the fiscal third quarter [10]. Guidance Update - Logitech raised its fiscal 2025 sales guidance to a range of $4.54-$4.57 billion, reflecting a year-over-year increase of 5.4-6.4% [12]. - The company also updated its non-GAAP operating profit guidance to $755-$770 million, projecting year-over-year growth of 8-10% [13]. Market Sentiment - Despite the positive earnings report, estimates have trended downward recently, with a consensus estimate shift of -14.88% [14]. - Logitech holds a Zacks Rank 2 (Buy), indicating expectations for above-average returns in the coming months [16].