NetGear can double on TP-Link ban, may reach triple digits, says activist

The past decade hasn’t been easy for NetGear, one of the world’s largest makers of networking equipment, but after years of structural and macro struggles that began before the COVID-19 pandemic, were exacerbated by it, and persisted in the aftermath, the skies finally appear to be clearing up,

Driven by drastically improved operational performance under new management, and mounting uncertainties over its key China-based competitor TP-Link, NTGR saw its shares nearly double in 2024, placing the stock among the year’s top performers.

Windward Management, a Florida-based activist fund, took a stake in the company in May of 2024, and its CIO Marc Clalfin was among the first to publicly point out NTGR’s potential.

One year after he first bought the shares--now trading roughly 120% higher--Investing.com had a chance to chat with Marc Chalfin about where the stock is headed next, and he was as optimistic as ever.

Windward’s NTGR Stake

Windward took a 4.2% stake in NetGear in May of 2024 on a simple premise: it’s a solid, EBITDA-positive business, with a massive cash pile and a staggeringly depressed valuation – at the time, the company was trading at roughly its cash value, implying $0 value for the actual business.

Chalfin estimated the business can be worth far more than $0. He believed improved operations under then-newly installed management and catalysts--such as WiFi-7 upgrade cycle and looming legal action against its key competitor TP-Link--will make the company’s potential more evident to the market.

Fast forward one year, the assumptions proved well-founded.

Improving Operations

NetGear’s finances and operations have not looked this strong in years.

The company just delivered a solid Q1 beat--EPS of $0.02, far above the analyst estimate of a loss of ($0.37); revenue came in at $162.1 million vs estimate of $152.24 million—outperforming on both top and bottom lines.

Its top-performing segment, NETGEAR (NASDAQ: NTGR) (NASDAQ:NTGR) for Business (NFB), continued to grow at double digits, while margins for all three business segments have shown significant improvements.

Moreover, given the TP-Link situation, the company was able to gain market share for the first time in years.

Pressure on TP-Link Continues to Mount

TP-Link, a Chinese maker of networking equipment, is by far NetGear’s biggest competitor. Over the years, it has successfully cost-pressured NTGR out of the lower-priced consumer segment and now enjoys an over 60% market share in the U.S.

Given the current state of U.S.-China relations, questions about TP-Link’s dominance of the U.S. wireless market have been raised for a while now, but only recently have they gained real political traction.

The Wall Street Journal reported that American lawmakers were considering an outright ban of TP-Link routers as far back as December of 2024.

More recently, in March of 2025, the House of Representatives Select Committee on China has openly called for an investigation into and a ban on the company. According to late April 2025 media reports, the Department of Justice is also conducting its own criminal antitrust investigation.

Marc Chalfin told us that Windward’s contact, a person who worked in the first Trump Administration and helped secure the ban on Huawei products, believes TP-Link can get restricted as soon as this summer.

What’s Next for NTGR

Despite NetGear’s massive 2024 and H1 2025 stock gains, Windward believes the company’s valuation is still very compelling.

Trading at around $30 per share, and with roughly $14 per share in cash, the enterprise value of the company’s entire business sits at about $16 per share – or less than Chalfin’s estimated value of the fast-growing NETGEAR for Business segment alone.

This means that investors get direct exposure to the plethora of potential catalysts—improved performance of other segments, long-awaited share buybacks, and the windfall from the possible TP-Link ban—at virtually no cost.

The TP-Link ban would obviously be the biggest catalyst – Windward’s head believes the company can pick up $100M in new EBITDA and sees a “path for shares to double quickly.”

His most optimistic scenario? Chalfin believes NetGear stock can reach triple digits driven by the TP-Link-induced boost to the consumer business, accelerating growth of the NFB segment, and continuously improving revenues and margins.

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