Why Is Logitech (LOGI) Down 4.6% Since Last Earnings Report?

Core Insights - Logitech's Q2 fiscal 2026 earnings exceeded estimates, with non-GAAP earnings of $1.45 per share, surpassing the Zacks Consensus Estimate by 18.9% and reflecting a 21% year-over-year increase [2] - The company reported revenues of $1.19 billion for Q2, exceeding consensus by 1.1% and showing a 6% increase year-over-year on a reported basis [2] Revenue Breakdown - Keyboards & Combos revenue rose 12% year-over-year to $235.9 million, while Pointing Devices grew 13% to $221.1 million, and Webcams increased 4% to $83.3 million [3] - Gaming revenues increased 8% year-over-year to $323.3 million, and Video Collaboration sales rose 5% to $167.7 million [4] - Headsets revenue decreased 7% to $43.5 million, Other categories' sales fell 30% to $26.3 million, and Tablet Accessories sales declined 1% to $85.1 million [5] Profitability Metrics - Non-GAAP gross profit increased to approximately $520 million from $492.4 million year-over-year, but the non-GAAP gross margin contracted by 30 basis points to 43.8% [6] - Non-GAAP operating income rose 19.3% to $230 million, with the operating margin expanding by 210 basis points to 19.4% [7] Liquidity and Shareholder Returns - As of September 30, 2025, Logitech had cash and cash equivalents of $1.38 billion, down from $1.49 billion in the previous quarter [8] - The company returned $340 million to shareholders through share repurchases and dividends in Q2, totaling $461 million in the first half of fiscal 2026 [8] Future Guidance - Logitech provided strong sales guidance for Q3 fiscal 2026, projecting revenues between $1.375 billion and $1.415 billion, indicating year-over-year growth of 3-6% [9][10] - The company anticipates non-GAAP operating profit in the range of $270-$290 million for Q3 [10] Market Sentiment - Recent estimates for Logitech have shown an upward trend, with a consensus estimate shift of 17.01% [11] - Despite a poor Growth Score of F, Logitech has a Momentum Score of C and an aggregate VGM Score of F, indicating mixed market sentiment [12] - The stock holds a Zacks Rank 1 (Strong Buy), suggesting expectations for above-average returns in the coming months [13]