NETGEAR, Inc. (NASDAQ:NTGR) defied analyst predictions to release its quarterly results, which were ahead of market expectations. Results overall were solid, with revenues arriving 5.2% better than analyst forecasts at US$171m. Higher revenues also resulted in substantially lower statutory losses which, at US$0.22 per share, were 5.2% smaller than the analyst expected. This is an important time for investors, as they can track a company's performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimate to see what could be in store for next year.

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Following last week's earnings report, NETGEAR's single analyst are forecasting 2025 revenues to be US$692.5m, approximately in line with the last 12 months. Earnings are expected to tip over into lossmaking territory, with the analyst forecasting statutory losses of -US$1.01 per share in 2025. Before this earnings announcement, the analyst had been modelling revenues of US$690.1m and losses of US$1.36 per share in 2025. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analyst upgrading their numbers and making a very favorable reduction to losses per share in particular.

See our latest analysis for NETGEAR

These new estimates led to the consensus price target rising 32% to US$29.00, with lower forecast losses suggesting things could be looking up for NETGEAR.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2025 compared to the historical decline of 14% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 8.0% per year. So it's pretty clear that, while it does have declining revenues, the analyst also expect NETGEAR to suffer worse than the wider industry.

The Bottom Line

The most obvious conclusion is that the analyst made no changes to their forecasts for a loss next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analyst believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for NETGEAR (1 is potentially serious!) that you should be aware of.

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