Logitech International's (LOGI) strong fiscal Q1 results were overshadowed by a supply-chain disruption that may erode market share, Wedbush Securities said Wednesday in a report.
The company posted better-than-expected gross and operating margins on product innovation, cost reductions, targeted promotional activity, and supply-chain adjustments, Wedbush said. Video conferencing reaccelerated, while gaming and personal workspace segments gained market share on strong product lines, the report said.
Logitech said a semiconductor component supplier faced a "serious incident" at a manufacturing facility, resulting in a temporary closure. The setback affects gaming and personal workspace products, and tight semiconductor supply may make sourcing components difficult, Wedbush said.
The disruption is expected to be resolved by Q4, though Logitech faces market-share risk in gaming if key products aren't available during the holiday season, the report said.
Wedbush cut its price target on Logitech stock to $130 from $135 and reiterated its outperform rating.
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