Shares of Logitech International(NASDAQ: LOGI) should be up today. The company's fiscal Q2 sales and earnings -- reported Monday -- both topped expectations. The maker of computer peripherals even raised its full-year revenue guidance. That improved sales outlook, however, just wasn't improved enough to please investors and the stock is down 9.5% around 1:10 p.m. ET.
Nitpicky
For the three-month stretch ending in September, Logitech turned $1.12 billion worth of revenue into adjusted per-share earnings of $1.20. Both were better than year-ago numbers of $1.06 billion and $1.09 per share. And, both were better than analysts' consensus expectations for a top line of $1.11 billion and per-share profits of $1.03.
The stumbling block? Guidance for the remainder of fiscal 2025. Although the company upped its top-line outlook from a range of $4.34 billion to $4.43 billion to a revised range of $4.39 billion to $4.47 billion, analysts were anticipating an average of $4.51 billion.
This slight shortfall clearly rattled investors, sending the stock nearly 10% lower as of mid-day Tuesday.
Opportunity knocks
The knee-jerk reaction is understandable, but not exactly reasonable.
See, it's not as if Logitech shares were overextended headed into Monday evening's release of the company's second-quarter report, and therefore ripe for profit-taking regardless of its results. This stock's actually been a lackluster performer since January despite respectable -- even if not thrilling -- sales and earnings growth that's expected to persist at least through next fiscal year.
It leads one to wonder if this sell-off is more about the broad market's overall bearish action today rather than Logitech itself.
Whatever the reason, today's dip is an opportunity to step into undervalued shares of an underappreciated technology company. Logitech International is doing fine. In fact, it reported sales growth in nearly all product categories last quarter, underscoring the breadth of demand as well as this brand name's reach.
It's not a growth holding, to be clear. It's a value stock, with many of the usual value characteristics, like consistent single-digit growth and a decent dividend yield of 1.5%. Trading at 19 times this year's expected per-share profits and 18 times next year's anticipated bottom line, however, Logitech shares are also priced like a value stock of its ilk.
If you were interested in owning it prior to today's sell-off, the only thing that's really changed is the stock's price. It's much more attractive now.
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James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Logitech International. The Motley Fool has a disclosure policy.
