LOGI Stock Forecast: Growth During the Pandemic Period Enables $162 Outlook for 2022

Emily_portraitThis LOGI stock forecast article was written by Emily Adelson – Analyst at I Know First.

Highlights: 

  • Logitech Inc has experienced rapid growth in the last few years, most significantly with their stock growth by over 135% percent in the past fiscal year alone, discussed below. 
  • Over the last fiscal year, the Logitech stock grew by 76%, and revenue doubled reaching 1.46 billion
  • Logitech’s recent acquisition of Streamlands and Sync has resulted in major growth within the company
  • My predicted stock price for June 2022 is $161.51, because of the growing demand for computer accessories as a result of the work-from-home environment. 

Overview: 

logi stock forecast logo
(Figure 1: SeekingAlpha.com)

Logitech Inc is an international corporation focused on creating and designing products and devices that enhance everyday experiences and people connect and immerse themselves in digital life. The business provides a wide variety of products from supportive keyboards to streaming and gaming devices to video targeted at providing solutions for the everyday workplace environment, as well as enhancing productivity and teamwork. Logitech Inc was first founded in 1981 by two Stanford University students who had the idea to create a leading computer accessory. Now, 40 years later, it has become one of the leaders in the industry and is used by well-known tech companies worldwide.

Growing Popularity in 2021 Makes LOGI Stock Bullish 

In the past year, Logitech stock has grown by 135%, from $56.79 to $133.35, which is LOGI’s historical peak. With the high demand for computer accessories to facilitate a work-from-home environment, it is predicted that LOGI stock is going to remain steady and rise in the coming years. Logitech is a growing company with approximately 6,500 employees and working around the globe in 102 countries. Looking at Logitech fiscal year report for 2021, we can see that they gained $5.25 billion dollars in revenue, up 76% from the previous year. 

logi stock forecast segmentation
(Figure 2: Craft.com)

As we can see from the chart above, the US segmentation holds $1.12 b of the sales from the overall company, approximately half of the revenue from and the Asia Pacific and EMEA hold 628.19 and 820.35 million dollars respectively. This shows that the international revenue is approximately double what the international revenue is. 

The company has seven different revenue streams, the most prominent being Keyboards, and Combos and Pointing Devices which bring in 498.47 and 516.64 million dollars respectively. In 2022, the stock is predicted to grow from $133.35 to $161.65 and maintain a steady growth rate of 0.21 percent. As a result, I predict that the LOGI stock will grow its company’s international base as it solidifies its consumer base and gains a more steady following worldwide. 

logi stock forecast
(Figure 3: CNN Business)

What Are LOGI Stock Ratios Telling Us?

According to valuation data,  the company’s P/E ratio is 40.24 – much higher than the industry average of 12.83 – meaning that the company has strong growth potential for the upcoming fiscal years. Thus, we can see that Logitech is the industry leader and successfully develops and sells new products, generating great amounts of revenue, and a large amount of capital expenditure because of their innovative products which are comfortable and ergonomic everyday additions to a computer. According to this chart by Craft.com, Logitech has a higher revenue index than similar competitor companies. Additionally, because of the COVID-19 pandemic and the need for enhanced technology to be equipped to work from home, Logitech experienced a boost in sales for the year 2020 and is predicted to experience a similar increase in future years.

LOGI Stock vs Industry Competitor Analysis

It is logical to compare Logitech’s performance to that of its competitors, most notably Razer Inc, Poly, and Incipio who all produce similar lines of products. Currently, The company has a growth rate of 116.56% percent in the 2021 fiscal year, an increase of almost triple the growth rate of the previous year, 13.61%, which shows the company is able to maintain a stable increase in profit over the last two years. Because of the COVID pandemic and the increased need for electronic work from home gadgets. I predict that as this trend continues, the market for LOGI will remain superior.

Logitech is one of the top competitors in the market for their top brand, well-known comfortable products. Other similar companies include Razer, Poly, Apple, Samsung Electronics, Incipio, and Harman. Logitech has done better than all these competitors because of its large market segmentation, allowing users to buy a variety of well-designed home products. See the table below for a comparison of LOGI data vs competitors. Logitech also has a very competitive position internationally, see figure 5 below for data. 

(Figure 4: Infront.com)

Logitech does appear to be a growing company, paying an annual dividend of $0.86. The company has an operating margin ratio of 21.82% which is higher than the industry average of 19.81%. That means Logitech has sufficient funds to keep up the operations of their business and is in a more competitive position compared to other similar competitors in the industry. According to ReadyRatios.com, Logitech is in the top 30 of all competitor companies in terms of revenue and ratios. The current operating cash flow shows the company has grown steadily and gained a large revenue over the past year, which signifies that the stock price is a higher value than the earnings of the company, therefore some may say the stock’s price is overvalued. 

Cash Flow Analysis Contributes To Bullish Outlook

According to Logitech’s recent press release, The company’s Net Income and OCF have more than doubled over the past two years and are predicted to grow over the next fiscal year at a steady rate of 5% and gain approximately $750 to 800 million dollars more in revenue in the next year. As pictured above, the price per share is about $133.33 per share. This share price is a 132% increase from the previous year’s share of $57.27. It is projected to show significant growth to 160.57 dollars. As a result of their popularity and fast growth, Logitech will outperform its competitors and have the most competitive prices in the industry in 2021 and continue in 2022. The company has an effective annual tax rate of 20.05%, an increase from 5% in 2019. 

The company is projected to continue on a steady line of growth, keeping a steady revenue of 14.21% for the years 2022 and the coming years beyond that. EBITDA and Depreciation are expected to maintain a steady increase of 9.52% and 2.49% respectively.

(Figure 6: Ycharts.com)
Revenue Estimates vs Actual Revenue Q1 2020-2023

According to a recent report by the CEO, the company encountered a major shortage in semiconductor chips – a major component needed to produce their products. The CEO expects an approximately 3-6 month hardship and an increase in prices as a result of the need to use other more expensive substitutes, to account for the shortage. In the 2022 fiscal year, the company is expected to continue on the same growth path, as stated in the key assumptions above. The risk-free rate was 2.25 respectively, which was the same degree of risk as big fortune Fortune 500 companies including Amazon and Apple. The company’s WACC is shown in the chart below. 

(Figure 7: GuruFocus.com)

Conclusion

From the above, I suggest buying the LOGI stock because the stock price is predicted to increase by approximately 21% over the next year. The company has done well with the COVID pandemic that caused a spike in demand for electronic peripheral devices enhancing the workplace environment for professionals that moved to a home office and is positioned to continue to grow at a high rate in future years.

logi stock forecast current

As stated above, Logitech’s ergonomic computer peripherals were spiking in demand because of the COVID 19 pandemic and the need for work from home accessories. It has gained a leading position in the market and grown tremendously over the past year, which puts the stock in a position for long-term success. 

My prediction of LOGI stock price for the next year ending June 2021 is $155. I Know First’s 1-month forecast above shows that the company has a very high signal of 7.77 and a predictability of 0.44, which supports my above prediction and analysis of the LOGI stock. Taking a look at the future forecast, LOGI shows a very strong signal for the 1-year timeline at 283.22 and strong growing predictability of 0.59 which indicates that LOGI is a valuable long-term investment and is going to be a strong demand in the market for years to come. 

Past Success Examples for LOGI Stock Forecast

On May 26, 2021, the I Know First Top Stocks package was able to successfully recognized the success of the LOGI stock and have been bullish in predicting the price from May 2021 until today. LOGI was among the top-performing stocks for the long position and was able to reach a high return of 19.50% which exceeded the S&P 500 index benchmark 0.75% by 18.75%.

logi stock forecast past
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