Why Logitech Stock Is Falling Today

Logitech International (NASDAQ: LOGI) stock is slipping in Tuesday's trading. The company's share price was down 2.6% as of 12:15 p.m. ET, according to data from S&P Global Market Intelligence .

Before the market opened this morning, the gaming and computer accessories specialist reported results for the first quarter of its current fiscal year (for the period ended June 30). In addition to delivering sales and earnings results that topped the market's expectations, the company also raised its full-year performance targets. But performance also weakened significantly along one key metric.

Logitech crushed earnings expectations in fiscal Q1

Logitech posted non-GAAP (adjusted) earnings per share of $1.13 on sales of $1.1 billion in the first quarter of its current fiscal year. For comparison, the average analyst estimate had called for the business to post per-share earnings of $0.88 on revenue of $1.03 billion.

Logitech's sales climbed 12.9% year over year on a currency-adjusted basis in the period. Meanwhile, adjusted operating income surged 67% year over year to hit $182 million.

On the other hand, cash flow from operations actually fell 27% year over year to come in at $176 million. The disparity could suggest that momentum for profits will not be as strong next year.

What comes next for Logitech?

For the company's current fiscal year, Logitech is guiding for sales to come in between $4.34 billion and $4.43 billion. Meanwhile, the company's previous guidance called for sales to be between $4.3 billion and $4.4 billion and the average analyst estimate had called for revenue of $4.38 billion. The company now anticipates closing out the fiscal year with sales up between 1% and 3% annually, but the better-than-expected sales momentum seen in Q1 is not expected to continue through the year.

Logitech also raised its adjusted operating income forecast. The company now expects operating income to be between $700 million and $730 million -- up from its previous forecast's call for operating income between $685 million and $715 million.

LOGI PE Ratio (Forward) data by YCharts

Logitech is now valued at roughly 21 times this year's expected adjusted earnings. That valuation may raise some concerns given that management is only forecasting low-single-digit sales growth for the year, but the company has solid long-term prospects thanks to its trusted brand and a reputation for quality in its corner of the technology and consumer goods spaces.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Logitech International. The Motley Fool has a disclosure policy .