Stifel Initiates Netgear with a Buy Rating and $35 Price Target

Stifel initiated coverage of Netgear with a Buy rating and $35 price target, citing the company's differentiated ProAV platform, growth opportunities in Home Networking and subscription services, and an attractive valuation. The analyst believes that these factors support a positive outlook for the company.

Stifel, a leading financial services firm, has initiated coverage on Netgear (NTGR) with a Buy rating and a price target of $35.00 USD, reflecting a positive outlook on the company's future performance [1]. The analyst leading this coverage, Tore Svanberg, has cited several key factors that support this rating.

Netgear, a provider of networking technologies for businesses, homes, and service providers, has seen significant changes under new leadership. The company's new CEO, CJ Prober, has driven initiatives that are repositioning Netgear, including the development of its professional audio-visual (ProAV) platform, expanded broadcasting partnerships, and the acquisition of cybersecurity firm Exium [2]. These moves are expected to drive growth in its enterprise networking segment and deliver double-digit revenue gains.

Stifel projects that Netgear will return to operating profitability by 2027 as revenue shifts toward higher-margin enterprise networking. Additionally, the company's refreshed product lineup and stabilizing consumer demand in home networking are expected to help maintain its competitive edge. Subscription services such as Armor and Insight are also seen as long-term drivers, providing high-margin recurring revenue streams.

The $35 target is based on a 1.0 times sales multiple and discounted cash flow analysis, reflecting confidence in the turnaround while accounting for execution risks. Netgear currently trades at just 0.6 times estimated 2026 sales, a steep discount to peers, indicating an attractive valuation.

Investors are advised to consider this new rating and price target as part of their investment strategy. The "Buy" rating indicates a strong endorsement by Stifel, suggesting that they expect the stock to outperform its peers in the market.

References:
[1] https://www.gurufocus.com/news/3075309/stifel-initiates-coverage-on-netgear-ntgr-with-a-buy-rating-ntgr-stock-news
[2] https://ca.investing.com/news/stock-market-news/netgear-turnaround-under-new-ceo-could-lift-growth-4173383