Netgear turnaround under new CEO could lift growth

Investing.com -- Stifel initiated coverage of Netgear (NASDAQ: NTGR) Inc with a Buy rating and a $35 price target, saying new leadership has set the stage for a business turnaround with growth opportunities in enterprise networking and subscriptions.

Analysts said CEO CJ Prober, who took over in early 2024, has driven changes that are beginning to reposition the company.

They highlighted Netgear’s professional audio-visual platform, expanded broadcasting partnerships, and the acquisition of cybersecurity firm Exium as catalysts for growth in its business segment, which Stifel expects to deliver double-digit revenue gains.

As revenue shifts toward higher-margin enterprise networking, Stifel projects Netgear will return to operating profitability by 2027.

In home networking, it said a refreshed product lineup and stabilizing consumer demand should help the company remain competitive.

The broker also pointed to subscription services such as Armor and Insight as long-term drivers, calling them high-margin recurring revenue streams that strengthen Netgear’s full network offering.

Its $35 target is based on a 1.0 times sales multiple and discounted cash flow analysis, reflecting confidence in the turnaround while accounting for risks in execution.

“At a low valuation, we believe NETGEAR deserves a valuation closer to comps, with an appropriate discount due to uncertainty around strategy turnarounds and inherit risks associated with the company’s push back toward profitability,” analysts at Stifel said.

Netgear trades at just 0.6 times estimated 2026 sales, a steep discount to peers.

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