Martin Plaier, November 9, 2018
In June, Logitech was listed as a buying recommendation due to the anticipated buzz in the game and videoconferencing. At that time the price was about 40 francs. It's deeper today. As I continued to believe in the mentioned boom and do not think about the presumed stock, I think it would be worthwhile to start. What do you think? CV.
I am confident that Logitech is well on the way and that it is possible to further increase the innovative business. This data is also available for July to September 2018. In the second quarter of the financial year 2018/2019, Logitech's revenue grew by almost 10% to $ 691 million.
The field of computer games E-Sports, which, in the opinion of management, promises to have a lot of potential in the future, really gives an incentive. Sales of Played Products rose 41 percent to $ 160.8 million. Today, this sector is the sector with the largest share of revenue and the most attractive growth prospects. As a result, the division now contributes to the participation of lions in total revenue with a significant margin.
But videoconferencing also increased by 24% in the second quarter of the fiscal 2018/2019, while sales of tablet PCs and keyboards increased by 11%. The data show that all areas grow in double digits, to which other companies can only dream.
But a lot of sales just do not help. Margins are also developing positively in Logitech. The bottom line in the second quarter was almost 38 percent of sales as a gross profit in Logitech's boxes. In the same quarter last year, it was 36.5 percent, which was already a lot. In all, salaries have increased by about 14% to $ 64.2 million.
These are all good numbers, but now there are problems: The expectations in Logitech have been a long time – in my opinion too much. With strong numbers, Logitech has missed great expectations. As a result, the price of the action was high. In addition, some investors obviously hoped that the French-Swiss company would once again increase its forecasts. These were also exaggerated expectations.
I see the risks in Logitech in the international trade dispute between the US and China. The penalties imposed on China by US President Trum remain with Logitech, as many products are manufactured by Logitech in China. This should reduce the margins in the future and under certain circumstances also affect sales. I doubt that Logitech can fully compensate for the negative impact of US penalties on China without damaging it. This aspect also affected the share, especially since the USA is the most important market for Logitech.
Nevertheless, I still see the potential in Logitech inventories, especially now that the stock is traded below. However, I must warn you: given the sharp corrections in technological stocks in the US and China, Logitech will face strong price changes in the future.
I do not omit that Logitech's titles were dropped below today's price. So, if you join Logitech, you will have to be at risk because tech technologies will likely see an accelerated ride up and down in the near future, especially as the trade dispute raises additional risks.