Wireless providers have 5G networks all over the world, which allows for faster, clearer internet connections, greater connectivity across the globe and advanced software applications and best of all, fewer lags for users.
What's up with 5G, anyway? 5G wireless connections totaled approximately 10 million in 2019 and should reach 1.01 billion by 2023, according to International Data Corporation (IDC). This means a 217.2% compound annual growth rate (CAGR) over this small period of time.
So, how might you invest? Let's find out.
What Exactly is 5G?
5G is the 5th generation mobile network after 1G, 2G, 3G and 4G networks. It's based on orthogonal frequency-division multiplexing (OFDM), a method of reducing interference across several different channels. The new 5G NR air interface can further enhance OFDM to provide more 5G access to more people.
5G is faster than 4G and delivers up to 20 Gigabits per second and 100+ Megabits-per-second (Mbps). 5G can support a 100x increase in traffic capacity and network efficiency.
It can also expand into new service areas in communications and connecting the Internet of Things (IoT).
Consider These 5G Stocks
How might you invest in 5G? Let's take a look at four alternative 5G stocks.
Ciena Corp., headquartered in Hanover, Maryland, provides network and communication infrastructure and operates through several segments, including networking platforms, platform software and services, Blue Planet automation software and services and global services. The company provides analytics, data and planning tools to assist customers in managing Ciena's networking platforms products, implements large-scale software and IT-led OSS transformations by transforming legacy networks into “service ready“ networks.
Ciena believes that in the fiscal first quarter 2022, revenue should be in the range of $840 to $850 million compared to the company’s previous expectation of $870 to $910 million. Ciena’s GAAP gross margin for the fiscal first quarter should grow from approximately 44% to 45%. Adjusted (non-GAAP) gross margin for the fiscal first quarter should rise 45% to 46%. Ciena’s GAAP operating expense for the fiscal first quarter should be approximately $324 million and the adjusted (non-GAAP) operating expense should come in at $290 million, in line with the previous guidance. The company expects to achieve revenue guidance of 11% to 13% annual growth for fiscal 2022.
F5 Inc., headquartered in Seattle, develops and provides software defined application services. It develops, markets and sells application delivery networking products that optimize the security, performance and availability of network applications, servers and storage systems.
Check out a few financial results from F5 Inc:
- First quarter fiscal year 2022 GAAP revenue of $687 million, up 10% from GAAP revenue of $625 million and non-GAAP revenue of $626 million.
- First-quarter fiscal year 2022 GAAP and non-GAAP revenue growth was driven by 19% product revenue growth and 2% global services revenue growth over last year.
- Non-GAAP product revenue was driven by 47% software revenue growth and 1% systems revenue growth compared to a year ago.
GAAP net income for the first quarter of fiscal year 2022 was $94 million, or $1.51 per diluted share compared to GAAP net income of $88 million, or $1.41 per diluted share.
Fiscal second quarter revenue in a range of $610 to $650 million. It further expects fiscal year 2022 revenue growth in a range of 4.5% to 8%, down from its prior expectation of 8% to 9% growth. The company expects fiscal year 2022 software revenue growth and global services revenue growth to increase as well.
Marvell Technology Inc., headquartered in Wilmington, Delaware, provides data infrastructure semiconductor solutions and offers computer, networking, storage and custom-related solutions.
Net revenue for the third quarter of fiscal 2022 was $1.211 billion. GAAP net loss for Q3 of fiscal 2022 was $63 million, or $0.08 per diluted share. Non-GAAP net income for Q3 fiscal 2022 was $364 million, or $0.43 per diluted share. Cash flow from operations for the third quarter was $265 million.
Marvell grew 13% sequentially and 61% year over year. Revenue grew substantially in each of its five end markets and the outlook looks as follows:
- Net revenue of $1.320 billion +/- 3%.
- GAAP gross margin of 47.9% to 49.8%.
- Non-GAAP gross margin of approximately 65%.
- GAAP operating expenses of between $630 million to $640 million.
- Non-GAAP operating expenses between $390 million to $395 million.
- GAAP diluted loss per share of $(0.03) +/- $0.04 per share.
- Non-GAAP diluted income per share of $0.48 +/- $0.03 per share.
Verizon Communications Inc., headquartered in New York, New York, provides communications, information and entertainment products and services to consumers, businesses and governmental agencies. It operates through the Verizon Consumer Group (Consumer) and Verizon Business Group (Business) segments. The company provides consumer-focused wireless and wireline communications services and products, video and data services, corporate networking solutions, security and managed network services, local and long distance voice services and network access to deliver various Internet of Things (IoT) services and products.
Total consolidated operating revenues in fourth-quarter 2021 were $34.1 billion, down 1.8% from Q4 2020. Full-year 2021 consolidated operating revenues were $133.6 billion, up 4.1% year over year. Cash flow from operations totaled $39.5 billion in 2021, a decrease from $41.8 billion from last year. The company ended 2021 with free cash flow of $19.3 billion, a decrease from $23.6 billion at year-end 2020. Verizon's unsecured debt grew by $18.2 billion YOY to $136.7 billion, but improved by $4.9 billion from the end of Q3 2021.
Seems volatile, right? Yes, but if you're an income-oriented investor, it's important to remember that Verizon offers a dividend. 5G wireless will likely continue to propel earnings and revenue growth. (Hint: Warren Buffett owns a lot of Verizon shares.)
Consider 5G Stocks
5G can deliver peak data speeds, ultra low latency, more reliability, increased availability and better performance for users. You can benefit from these opportunities as 5G continues to spread.
Before you consider F5, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and F5 wasn't on the list.
While F5 currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
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