Hot Growth Special Report 2006 >



Netgear (NTGR)

It's not as famous Apple, Sony, or Cisco, but scrappy Netgear has carved out valuable territory in the war for the digital living room. It's long been a leading provider of wireless routers for consumers and small businesses, largely thanks to a vast distribution network of more than 6,000 retailers -- particularly in Europe and Asia. And the company is rapidly expanding its sights to new kinds of products, including home storage gear and a new phone designed specifically to work with Skype's free peer-to-peer Net-based calling service. With sales expected to grow 18% this year, from $449 million in 2005, the stock has risen to $24, 40% higher than a year ago. "They're en fuego," says JMP Securities analyst Sam Wilson. "Consumer broadband is hot, and Netgear is the best pure-play [investment] in consumer broadband there is."

Company Info

2005 Rank


Market Value*
($ Millions)


($ Millions)


Sales Growth
(3-yr. avg. annual)

24.2 %

($ Millions)


Profit Growth
(3-yr. avg. annual)

62.2 %

Return on Inv. Capital (3-yr.)

12.2 %

Share Price
12-Mo. Hi/Lo


Share Price
As of 4/28/06


Return on Equity

14.4 %

P/E Ratio


No. of Employees


Industry Communications Equipment


Location Santa Clara, Calif.
Phone 408 907-8000
*Trailing 12 months
Stock price data as of 4/28/06
DATA: Standard & Poor's Compustat

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Company Snapshot

NETGEAR engages in the design, development, and marketing of networking products for home users and small businesses worldwide. The company's product offerings enable users to share Internet access, peripherals, files, digital multimedia content, and applications among multiple personal computers and other Internet-enabled devices. Its ethernet networking products include switches; network interface cards; adapters and bridges; peripheral servers, such as print servers and disk servers; and VPN firewalls. NETGear's broadband access products comprise routers, gateways, IP telephony products, and wireless gateways. The company's network connectivity products include wireless access points, wireless network interface cards and adapters, media adapters, and Powerline adapters and bridges. It sells its products primarily through traditional retailers, online retailers, direct market resellers, value-added resellers, and broadband service providers primarily in the U.S., Britain, Germany, and Asia Pacific. NETGEAR was founded in 1996 and has its headquarters in Santa Clara, Calif.

Data provided by Capital IQ
Patrick C. S. Lo

Patrick C. S. Lo, 49

Chairman and Chief Executive Officer

Total Compensation*

$ 666,115

Total Options Value*

$ 15,994,207

* Fiscal Year 2005

Brown University - BS

Executive Bio

Patrick Lo has been a director of Netgear since 2000 and has been its chairman and chief executive officer since March, 2002. From September, 1999 to March, 2002, Lo served as president, and from the company's inception in 1996 to September, 1999, he served as vice-president and general manager. Lo joined Bay Networks, a networking company, in August, 1995, to launch a division targeting the small-business and home markets and established the Netgear division in January, 1996. From 1983 until 1995, he worked at Hewlett-Packard, where he served in various management positions in software sales, technical support, network product management, sales support, and marketing in the U.S. and Asia, most recently as the Asia/ Pacific marketing director for Unix servers. Lo received a BS in electrical engineering from Brown University.

Management Team

Key Executives

Patrick C. S. Lo; Mark G. Merrill; Jonathan R. Mather; Michael F. Falcon; Charles T. Olson

Board Directors

Jef Graham; Patrick C. S. Lo; Linwood A. Lacy; Gerald A. Poch; Gregory Rossmann; A. Timothy Godwin; Ralph E. Faison

Executive Data provided by Capital IQ