A long-time favorite of MarketScreener and once featuring in our Europa One fund, Logitech continues to win over users with a high-end product catalog, crafted by seasoned design teams, being consistently acclaimed by specialist press.
Its results from the last fiscal year are bang in line with the standards shareholders have come to expect. Revenue increased by 6.3% over the last twelve months, while operating profit rose three times faster, up 18%.
It is remarkable that Logitech has kept its gross margins above 40% since the pandemic in such a competitive sector, and that it has managed to resist the highly inflationary environment so effectively through disciplined cost structure control.
The group remains exceptionally well-capitalized, with $1.5bn in excess cash, likely earmarked for a future acquisition. It also maintains excellent cash flow dynamics, enabling a dividend payout of $233m, coupled with the allocation of $535m to share buybacks over the fiscal year.
MarketScreener notes that these share buybacks were executed at multiples of between 14x and 17x EBITDA. This is around the group's historical valuation average, albeit far from the 10-year floor of 10x EBITDA, while fairly close to the 20x EBITDA ceiling where the enterprise value almost systematically meets resistance.
It has a positive 10-year track record, with revenue more than doubling from $2.2bn to $4.8bn, with operating profit nearly quadrupling from $205m to $775m. It should however be noted that top-line growth has tended to stall since acquisitions ceased. To mitigate this effect, Logitech has since turned to share buybacks.
Notwithstanding its excellent management, the group's current valuation is trading significantly above its historical average and therefore does not appear to offer a particularly attractive entry point.
