LOGITECH INTERNATIONAL-REG (NASDAQ:LOGI) – A Quality Stock Worth Considering

LOGITECH INTERNATIONAL-REG (NASDAQ:LOGI) stands out as a strong candidate for quality investors, meeting key criteria for profitability, financial health, and sustainable growth. The company, known for its hardware and software solutions in gaming, audio, and productivity, demonstrates consistent performance and efficient capital allocation. Below, we examine why LOGI fits the quality investing profile.

Strong Profitability and Returns

• High ROIC: LOGI’s Return on Invested Capital (excluding cash and goodwill) is an impressive 117.6%, indicating exceptional efficiency in generating profits from capital deployed.
• EBIT Growth Outpaces Revenue: Over the past five years, EBIT growth (19.0% CAGR) has exceeded revenue growth (4.6% CAGR), reflecting improving operational efficiency and pricing power.
• Healthy Margins: The company maintains strong gross (43.1%) and operating margins (14.6%), outperforming most peers in the technology hardware sector.

Financial Strength and Stability

• Debt-Free Balance Sheet: LOGI carries no debt, with a Debt/Free Cash Flow ratio of 0, ensuring financial flexibility.
• High Profit Quality: The five-year average Profit Quality (FCF/Net Income) is 120.4%, meaning the company converts net earnings into cash effectively.
• Liquidity: A current ratio of 2.35 and quick ratio of 1.90 suggest ample short-term financial resilience.

Growth Prospects

• Historical Growth: LOGI has delivered solid revenue growth (8.9% CAGR over five years) and EPS growth (17.7% CAGR).
• Future Expectations: Analysts project continued EPS growth (8.8% annually) and modest revenue expansion (4.6%).

Valuation Considerations

LOGI trades at a P/E of 19.6, slightly below the industry average, while its Price/Free Cash Flow ratio suggests a reasonable valuation relative to peers.

Our Caviar Cruise screener lists more quality stocks updated daily. For a deeper dive, review the full fundamental analysis of LOGI.

Disclaimer

This is not investment advice. Always conduct your own research before making investment decisions.