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Why Buying the Dip in Logitech Stock Might be Worth It

All indicators point towards this tech stock being undervalued

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Logitech International SA (NASDAQ:LOGI) is down over 8% in 2022, and has shed 28.7% year-over-year. It looks like the equity is putting some distance between its current levels and its Feb. 24 annual low of $69.92, last seen up 3.2% at $76.88, and set for its first close atop the 10-day moving average since Feb. 15. Meanwhile, Logitech International does offer a dividend yield of 1.27% with its forward dividend at $0.95.

logi march 2

Yesterday, Wedbush upgraded the stock to "outperform" from "neutral," maintaining its $90 price target. There's plenty of room for bull notes. Of the five in coverage, only two analysts consider the stock a "strong buy." 

Options traders have also been pessimistic. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), LOGI sports a 50-day put/call volume ratio of 2.50, which stands higher than 92% of readings from the past year. In other words, puts have been picked up at a much quicker-than-usual clip during the past 10 weeks. 

From a fundamental point of view, Logitech stock also provides a very appealing valuation given the tech company’s growth opportunity and performance in recent years. Logitech stock trades a forward price-earnings ratio of 15.85 and a price-sales ratio of 2.22.

LOGI also has an excellent balance sheet with $1.36 billion in cash and only $41.05 million in total debt. Moreover, the company has increased its trailing 12-month revenues and net income by 125% and 265%, respectively, since fiscal 2018. In addition, LOGI is estimated to grow its revenues 5.6% and its earnings 8.4% for fiscal 2022, making the stock an exciting option overall for value investors.

 

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