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NTGR Buys Exium to Deliver an Integrated SASE Platform for SMEs & MSPs
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Key Takeaways
NTGR will acquire Exium to deliver an integrated SASE platform for SMEs and service providers.
The move enhances NTGR's cloud strategy by adding Exium's scalable, security-focused technology.
Customers will gain centralized, easy-to-deploy networking with built-in firewall and security features.
NETGEAR Inc. (NTGR - Free Report) recently inked a definitive agreement to acquire Exium, a cutting-edge cybersecurity company. The initiative highlights NTGR’s continued focus on cloud-based innovations, aligning with its long-standing vision of providing intelligent, reliable, and simplified networking solutions for small and medium enterprises (SMEs) and Managed Service Providers (MSPs). The deal is expected to be closed by the end of the second quarter of 2025, pending customary closing conditions.
SASE (Secure Access Service Edge) is an architecture that combines networking and security functions, such as SD-WAN, firewall-as-a-service (FWaaS), secure web gateways, and zero trust network access (ZTNA), into a single cloud-native service. The buyout is poised to deliver powerful synergy between networking and cybersecurity, creating a first-of-its-kind, fully integrated SASE platform tailored for the evolving needs of SMEs.
Management highlighted a report from Gartner, as per which the SASE market is poised for explosive growth. The market value is projected to reach $25 billion by 2027 at a CAGR of 29%, as more organizations shift toward cloud-driven networking and security solutions. By incorporating Exium’s technology and expertise, NETGEAR for Business (NFB) aims to deliver a comprehensive, user-friendly solution that combines wired and wireless connectivity with built-in firewall protection and advanced security features.
Through this transaction, NETGEAR is not only acquiring a cybersecurity product but also a purpose-built, MSP-focused platform. Exium has developed its SASE solution from the ground up with usability and scalability in mind, which aligns closely with NTGR’s mission of making advanced technology accessible for SMEs, as many of them lack dedicated security staff or complex IT infrastructure. By integrating Exium’s SASE capabilities into NETGEAR's Insight cloud management platform, customers gain a seamless, centralized and easy-to-deploy solution.
Key benefits include “single-pane-of-glass management”, quick deployment, cost-effectiveness, advanced cybersecurity and scalability. NETGEAR’s strategy will likely continue to evolve as it incorporates more AI-driven threat detection and automated security management features, positioning itself to handle the growing complexities of modern threats without requiring deep technical expertise from end users.
NTGR Gains Momentum in NFB Segment, High Seasonality Hurts
Strong performance in NETGEAR’s NFB segment and growing recurring revenues are positive indicators for the company’s future. Revenues in the NFB segment surged 15.4% year over year to $79.2 million, driven by continued demand for ProAV managed switch products. Gross margin for the segment rose significantly to 46.3%, reflecting an improvement of 440 basis points from the prior-year level. Expansion efforts in the Wi-Fi LAN space also add to the positive outlook.
Looking ahead, NETGEAR expects steady end-user demand for its ProAV managed switches to continue. While the company is still experiencing supply constraints for certain managed switch models, it anticipates improvement starting in the second quarter and further easing through the rest of the year.
In terms of recurring revenues, NETGEAR brought in $8.7 million during the last reported quarter and now has 559,000 recurring subscribers. Growing this subscriber base is seen as key to ensuring long-term financial health and consistent cash flow.
Its business tends to follow a seasonal pattern, with higher sales typically occurring in the third and fourth quarters. This uptick is driven by back-to-school purchases and holiday shopping in consumer markets. As a result, the company experiences fluctuations in cash flow and less consistent earnings throughout the year, making financial performance harder to predict.
NTGR’s Zacks Rank & Stock Price Performance
NTGR currently carries a Zacks Rank #3 (Hold). Shares of the company have soared 114% in the past year compared with the sub-industry's growth of 40.2%.
Juniper is leveraging the 400-gig cycle to capture hyperscale switching opportunities inside the data center. The company is set to capitalize on the increasing demand for data center virtualization, cloud computing and mobile traffic packet/optical convergence. Juniper also introduced new features within the AI-driven enterprise portfolio that enable customers to simplify the rollout of their campus wired and wireless networks while bringing greater insight to network operators. In the last reported quarter, it delivered an earnings surprise of 4.88%.
Arista delivered a trailing four-quarter average earnings surprise of 11.82% and has a long-term growth expectation of 14.81%. Arista currently serves five verticals, namely cloud titans (customers that deploy more than 1 million servers, cloud specialty providers, service providers, financial services and the rest of the enterprise. It supplies products to a prestigious set of customers, including Fortune 500 global companies in markets such as cloud titans, enterprises, financials and specialty cloud service providers.
Ubiquiti’s effective management of its strong global network of more than 100 distributors and master resellers improved its visibility for future demand and inventory management techniques. In the last reported quarter, Ubiquiti delivered an earnings surprise of 33.3%. Its highly flexible global business model remains well-suited to adapt to the changing market dynamics to overcome challenges while maximizing growth.
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NTGR Buys Exium to Deliver an Integrated SASE Platform for SMEs & MSPs
Key Takeaways
NETGEAR Inc. (NTGR - Free Report) recently inked a definitive agreement to acquire Exium, a cutting-edge cybersecurity company. The initiative highlights NTGR’s continued focus on cloud-based innovations, aligning with its long-standing vision of providing intelligent, reliable, and simplified networking solutions for small and medium enterprises (SMEs) and Managed Service Providers (MSPs). The deal is expected to be closed by the end of the second quarter of 2025, pending customary closing conditions.
SASE (Secure Access Service Edge) is an architecture that combines networking and security functions, such as SD-WAN, firewall-as-a-service (FWaaS), secure web gateways, and zero trust network access (ZTNA), into a single cloud-native service. The buyout is poised to deliver powerful synergy between networking and cybersecurity, creating a first-of-its-kind, fully integrated SASE platform tailored for the evolving needs of SMEs.
NETGEAR, Inc. Price and Consensus
NETGEAR, Inc. price-consensus-chart | NETGEAR, Inc. Quote
Management highlighted a report from Gartner, as per which the SASE market is poised for explosive growth. The market value is projected to reach $25 billion by 2027 at a CAGR of 29%, as more organizations shift toward cloud-driven networking and security solutions. By incorporating Exium’s technology and expertise, NETGEAR for Business (NFB) aims to deliver a comprehensive, user-friendly solution that combines wired and wireless connectivity with built-in firewall protection and advanced security features.
Through this transaction, NETGEAR is not only acquiring a cybersecurity product but also a purpose-built, MSP-focused platform. Exium has developed its SASE solution from the ground up with usability and scalability in mind, which aligns closely with NTGR’s mission of making advanced technology accessible for SMEs, as many of them lack dedicated security staff or complex IT infrastructure. By integrating Exium’s SASE capabilities into NETGEAR's Insight cloud management platform, customers gain a seamless, centralized and easy-to-deploy solution.
Key benefits include “single-pane-of-glass management”, quick deployment, cost-effectiveness, advanced cybersecurity and scalability. NETGEAR’s strategy will likely continue to evolve as it incorporates more AI-driven threat detection and automated security management features, positioning itself to handle the growing complexities of modern threats without requiring deep technical expertise from end users.
NTGR Gains Momentum in NFB Segment, High Seasonality Hurts
Strong performance in NETGEAR’s NFB segment and growing recurring revenues are positive indicators for the company’s future. Revenues in the NFB segment surged 15.4% year over year to $79.2 million, driven by continued demand for ProAV managed switch products. Gross margin for the segment rose significantly to 46.3%, reflecting an improvement of 440 basis points from the prior-year level. Expansion efforts in the Wi-Fi LAN space also add to the positive outlook.
Looking ahead, NETGEAR expects steady end-user demand for its ProAV managed switches to continue. While the company is still experiencing supply constraints for certain managed switch models, it anticipates improvement starting in the second quarter and further easing through the rest of the year.
In terms of recurring revenues, NETGEAR brought in $8.7 million during the last reported quarter and now has 559,000 recurring subscribers. Growing this subscriber base is seen as key to ensuring long-term financial health and consistent cash flow.
Its business tends to follow a seasonal pattern, with higher sales typically occurring in the third and fourth quarters. This uptick is driven by back-to-school purchases and holiday shopping in consumer markets. As a result, the company experiences fluctuations in cash flow and less consistent earnings throughout the year, making financial performance harder to predict.
NTGR’s Zacks Rank & Stock Price Performance
NTGR currently carries a Zacks Rank #3 (Hold). Shares of the company have soared 114% in the past year compared with the sub-industry's growth of 40.2%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the broader technology space are Juniper Networks, Inc. (JNPR - Free Report) , Arista Networks, Inc. (ANET - Free Report) and Ubiquiti Inc. (UI - Free Report) . JNPR presently sports a Zacks Rank #1 (Strong Buy), while ANET and UI carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Juniper is leveraging the 400-gig cycle to capture hyperscale switching opportunities inside the data center. The company is set to capitalize on the increasing demand for data center virtualization, cloud computing and mobile traffic packet/optical convergence. Juniper also introduced new features within the AI-driven enterprise portfolio that enable customers to simplify the rollout of their campus wired and wireless networks while bringing greater insight to network operators. In the last reported quarter, it delivered an earnings surprise of 4.88%.
Arista delivered a trailing four-quarter average earnings surprise of 11.82% and has a long-term growth expectation of 14.81%. Arista currently serves five verticals, namely cloud titans (customers that deploy more than 1 million servers, cloud specialty providers, service providers, financial services and the rest of the enterprise. It supplies products to a prestigious set of customers, including Fortune 500 global companies in markets such as cloud titans, enterprises, financials and specialty cloud service providers.
Ubiquiti’s effective management of its strong global network of more than 100 distributors and master resellers improved its visibility for future demand and inventory management techniques. In the last reported quarter, Ubiquiti delivered an earnings surprise of 33.3%. Its highly flexible global business model remains well-suited to adapt to the changing market dynamics to overcome challenges while maximizing growth.