On Aug 20, 2014, we issued an updated research report on
Ubiquiti Networks, Inc.
). The company is a leading provider of communication networks,
telecom services and support solutions.
The rapid growth in the smartphone market is propelling the
operators to expand network coverage and upgrade their networks for
higher speed and capacity. Ubiquiti stands to benefit from this
rush. According to Cisco Visual Networking Index, global Internet
protocol, or IP traffic is expected to increase at a compound
annual growth rate (CAGR) of 21% through 2013-2018.
The company, in order to tap the market potential, has been
developing a range of products and platforms to satisfy the growing
consumer needs. Recently, Ubiquiti launched a number of products
including airMAX ac, UniFi Video, UniFi VoIP and EdgeSwitch. Apart
from this, the company broadened its UniFi platform to include the
Software Defined Networking technology. Moreover, it has launched a
wireless Internet platform, Ubiquiti World Network (UWN). UWN is
formed by a consortium of global independent Internet service
providers (ISP), for providing ISPs with a unified platform to
foster growth and innovation in the wireless industry, while
catering to consumer needs.
Also, Ubiquiti's strong research & development (R&D) team
and cost-effective business strategies will drive growth going
However, the company's businesses, dispersed across the globe, are
highly susceptible to the negative impacts of international
political and economical conditions. Continued turmoil in regions
like Russia, Ukraine, Israel, Argentina and especially Iraq, poses
a substantial risk to Ubiquiti's businesses as these regions
generate about 6% of its total sales.
Stiff competition from other wireless equipment providers like
), Aruba Networks, Inc. (
) and Aviat Networks, Inc. (
) also remains a concern for this Zacks Rank #3 (Hold) company.
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