Logitech (LOGI) Expands High-Performance Gear Portfolio

Logitech International S.A.’s (NASDAQ:LOGI) brand, Logitech G, recently expanded its range of high-performance gear portfolio with the roll out of two products.

The company introduced Logitech G560 PC Gaming Speaker and Logitech G513 Mechanical Gaming Keyboard, both designed for the requirements of gamers. The latest G513 keyboard and G560 speakers with LIGHTSYNC would complement the company’s G502, the best selling gaming mouse globally, in creating a complete gaming solution.

Notably, the Logitech G560 is the first gaming speaker system to boast Logitech G LIGHTSYNC technology that helps in synchronization of light and sounds to gameplay. With the LIGHTSYNC technology, Logitech G560 synchronizes RGB lighting and powerful audio to on-screen gameplay. Moreover, this gaming speaker features multiple connection options that include USB, 3.5mm and Bluetooth. These features combined with the built-in Logitech Easy-Switch technology allows users to switch flawlessly between any four connected devices.

Additionally, the Logitech G513 features LIGHTSYNC RGB, that offers options for two Romer-G mechanical key switches and a premium palm rest. Both the Logitech G560 PC Gaming Speaker and G513 Mechanical Gaming Keyboard are likely to be accessible from the beginning of April 2018, at retail outlets.

Our Take

We believe that increased adoption of new mobile platforms, in both mature and emerging markets, is fueling the demand for Logitech’s peripherals and accessories. For instance, this leading computer peripherals company realized its highest quarterly sales ever and maximum sales growth in seven years in third-quarter fiscal 2018. This outperformance was driven by robust sales across product categories and strong momentum in Gaming, Mobile Speakers and Video Collaboration businesses. Consequently, shareholders seemed to be impressed with the company’s prospects. In the past three months, shares of Logitech have rallied 18% significantly outperforming the industry’s gain of 1.9%.

Furthermore, the company is intending to tap the high potential market for accessories by pursuing innovation and expanding its product lines. Already, it has manufactured innovative offerings like fastest performing mouse and keyboard switches, and wireless mouse with longest battery, among others. Some of the notable products introduced over the past few months include Pro Gaming Mouse, upgraded version of Boom and Megaboom product line, Ultimate Ears Wonderboom and SmartDock. Additionally, Logitech is highly optimistic about the strong demand for Jaybird products. With such a strong product roster and excellent demand, the company remains very confident about the market traction of its offerings in coming times.

Meanwhile, Logitech has been able to leverage its software and go-to-market capabilities to drive market share gains and growth. Encouragingly, the company is focused on venturing into new businesses and over the past three years. It has grown successful businesses including Bluetooth Speakers and Video Collaboration via advanced offerings. Moreover, Logitech’s cloud-based video conferencing services were among the key growth drivers.

Despite the above-mentioned tailwinds, the rising trend for smaller, mobile computing devices with touch interfaces and the declining popularity of desktop PCs have rapidly changed the market and usage models for PC peripherals and webcams. Also, the Zacks Rank #3 (Hold) company’s revenues are prone to be affected by the adverse impact of currency translation as the majority portion of it comes from outside the United States.

Key Picks

Some better-ranked stocks from the same space are Lam Research Corporation (NASDAQ:LRCX) , Cisco Systems, Inc. (NASDAQ:CSCO) and Intuit Inc. (NASDAQ:INTU) . While Lam Research sports a Zacks Rank #1 (Strong Buy), Cisco Systems and Intuit carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Lam Research has surpassed estimates in the trailing four quarters, with an average positive earnings surprise of 9.2%.

Cisco Systems has outpaced estimates thrice in the preceding four quarters, with an average earnings surprise of 3%.

Intuit has surpassed estimates in the preceding four quarters, with an average positive earnings surprise of 37.2%.

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