"Logitech is like a really nice house in a bad neighbourhood," as one analyst put it when we were preparing this report. Active in the ultra-competitive computer accessories markets (video conferencing, streaming, gaming, audio, mice, keyboards, etc.), the Swiss firm is nonetheless esteemed by a large majority of analysts. It is known for setting high standards for the quality and user-friendliness of its products, but also, increasingly, for their careful design. The brand has carved out a spot for itself at the forefront of video conferencing and gaming, both sources of long-term growth. Of the record-breaking number of new products (more than 20) unveiled last quarter, Logitech launched the G Cloud handheld gaming console in the United States, in partnership with the Chinese firm Tencent for the software. The gadget has received favourable reviews from critics. This test run could eventually grow into a major new market.
In 2020 and 2021, Logitech fully benefited from the pandemic lockdowns, posting a strong rise in sales. The explosion in remote working propelled the group’s share price to almost 120 Swiss francs in early June 2021. Next, a correction drove the share price sharply downwards, before it was caught up in the all-round tech stock debacle, falling below the 45 Swiss franc mark last October.
Despite today’s adverse market conditions (eroding consumer purchasing power, exchange rate fluctuations, supply chain problems), many experts feel that the Lausanne-based firm nevertheless has the arguments it needs to outshine its competitors. Logitech’s quarterly earnings report published at the end of October reassured analysts. Revenue was down 12% year on year to $1.149 billion, and profits fell 38,2% to $82 million. But amid the current crisis, a much worse performance had been feared. Relief showed through the day after the results were announced, in the sharp rise in Logitech’s share price. Since then, the stock has climbed by more than 25% and is currently hovering around 55 Swiss francs. The company trimmed its operating expenses by 15% in the last quarter compared to the previous year. Logitech maintains its revenue targets for the current financial year, expecting a decline within the range of 4% and 8%, as the holiday period is traditionally brisk with high sales volumes.