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Anticipating NVIDIA and Semiconductor Rivals in Earnings Week Anticipating NVIDIA and Semiconductor Rivals in Earnings Week

With corporate heavyweights investing millions of dollars in artificial intelligence (AI), semiconductor stocks have been in focus as the key beneficiaries of this trend.

Semiconductor companies are facing sluggishness in the industrial and auto end markets and communications infrastructure, while demand for AI infrastructure remains “extremely robust, led by strong capex outlooks from major U.S. hyperscalers,” according to KeyBanc Capital Markets.

The Semiconductor Off-Season Earnings: The three companies scheduled to report earnings this week are Nvidia Corp NVDA, Analog Devices, Inc. ADI and indie Semiconductor Inc INDI.

The Semiconductor Analyst: John Vinh reiterated an Overweight rating on both Analog Devices and indie Semiconductor, while keeping the price targets unchanged at $220 and $12, respectively.

Check out other analyst stock ratings.

Analog Devices

“We expect ADI to report in-line results and in-line to slightly lower guidance, due to softer demand trends across industrial and auto, and continuous inventory destocking, partially offset by price increases in 1Q,” Vinh wrote in the note.

Expectations for the latest quarter:

  • Revenue: $2.51 billion versus consensus estimates of $2.50 billion
  • Earnings: $1.72 per share versus consensus estimates of $1.71 per share

 

indie Semiconductor

The company could also post in-line results and in-line to slightly lower guidance “on incremental weakness in auto across ICE and EV, with modest pricing pressure as a result of TXN’s price cut,” the analyst stated.

Expectations for the latest quarter:

  • Revenue: $73 million, in-line with the consensus estimates
  • Earnings: Breakeven, versus consensus estimates of a loss of 1 cent per share
See also  Logitech's Strong Quarterly Performance and Future Outlook Logitech Crushes Estimates in Q4 Earnings and Revenues

Closing fiscal 2024 with a flourish, Logitech International S.A. delivered a remarkable fourth quarter, surpassing analyst projections. Reporting non-GAAP earnings of 99 cents per share, a significant jump from the year before, the company outshone the Zacks Consensus Estimate of 63 cents per share. Bolstered by increased revenues and reduced costs, Logitech's bottom-line performance reflected a spike of 98%.

A Turning Point After Pandemic Boom

This successful quarter marked a pivotal moment for Logitech, heralding its first year-over-year sales growth following a prolonged downtrend post the pandemic-induced surge. For nearly two and a half years, Logitech had been grappling with declining revenues, a challenging landscape that finally saw a positive shift at the close of fiscal 2024.

Segment Performance Overview

Logitech experienced growth in key product categories during the fiscal year. Noteworthy increases were observed in revenues from Keyboards & Combos and Gaming. The Headsets, Pointing Devices, Webcams, and Video Collaboration categories also displayed commendable progress. However, certain segments like Tablet Accessories and the Other category faced declines in sales, indicative of a mixed performance across the spectrum.

Margin Expansion and Operating Efficiency

Fueled by a surge in non-GAAP gross profit and an expansion in gross margin, Logitech showcased a robust operating performance. With a substantial increase in non-GAAP operating income and a marked improvement in operating margin, the company demonstrated enhanced cost management and efficiency in its operations, highlighting a positive trajectory in its financial health.

Key Highlights from Fiscal 2024

Despite a year-over-year decline in sales, Logitech's revenue for fiscal 2024 surpassed both the Zacks Consensus Estimate and the management's own guidance. Non-GAAP earnings also showed an impressive growth rate, underscoring the company's resilience and adaptability in navigating market fluctuations and challenges.

Financial Fortitude and Forward Projections

Bolstered by healthy cash reserves and a strong operational cash flow, Logitech enters fiscal 2025 with a solid foundation. The company's projections for the coming year highlight a cautious optimism, with a focus on revenue growth, margin stability, and prudent capital allocation strategies to drive sustainable value creation for its investors.

Analyst Perspectives and Market Comparisons

Despite facing a YTD stock decline of 16.5%, Logitech remains on the radar of analysts and investors alike. Comparisons with other industry players like NVIDIA, Bentley Systems, and Twilio shed light on broader trends in the tech sector, offering valuable insights into market dynamics and investment opportunities.

The Jazz of Financial Performance: A Tale of Two Stocks

 

Nvidia

The analyst said he expected Nvidia to post “strong beat and raise results, supported by strength in demand across all regions outside of China, driven mostly by demand for H100 GPUs.”

Expectations for the latest quarter:

  • Revenue: $21.0 billion versus consensus estimates of $20.2 billion
  • Earnings: $4.72 per share, versus consensus estimates of $4.51 per share

 

NVDA, ADI, INDI Price Action: Shares of Nvidia, Analog Devices and indie Semiconductor declined by 5.92% to $683.40, by 0.17% to $187.93, and by 2.11% to $7.21, respectively, at the time of publication on Tuesday.

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