InterDigital, Inc. (IDCC - Free Report) recently validated a fundamental building block for mobile network operators that would facilitate the delivery of 5G wireless services. At the Next Generation Mobile Networks Industry Conference and Exhibition, the company unveiled an advanced service framework for the operators that would allow them to move to a cloud-native deployment of mobile networks.
Notably, the latest service framework was developed as part of the 3GPP Release 16 specifications. As a matter of fact, the framework is capable of routing control plane service requests to end users as well as connected terminals across a virtualized network setup. The demonstration highlighted the way virtual user terminals can connect to a 5G network and perform a brief session with three distinct 5G services and eventually detach. With the demonstration, the company has validated the effectiveness of 3GPP enhanced service-based architecture combined with the ETSI NFV lifecycle management system.
InterDigital’s commitment toward licensing its broad portfolio of technologies to wireless terminal equipment makers, which allows it to expand core market capability, is noteworthy. Currently, it has many leading companies under its licensing agreement. Also, InterDigital expects to grow its licensing revenue base by adding a number of other companies that have attained market prominence over the past several years.
The company’s global footprint, diversified product portfolio and ability to penetrate in different markets are commendable. Apart from its strong portfolio of wireless technology solutions, the addition of technologies related to sensors, user interface and video to its offerings is likely to drive significant value, considering the massive size of the market it licenses.
This Zacks Rank #3 (Hold) company has outperformed the industry it belongs to in the past month. The stock has gained 2% against the industry’s decline of 9.3% in the period.
However, InterDigital faces significant competitive pressure and needs to constantly work on product quality and customer service. Currently, it operates nine R&D facilities in five countries. Also, in order to hedge the competitive pressure, InterDigital has to invest significantly in R&D to come up with innovative technology solutions, which in turn might lead to escalated costs.
Some better-ranked stocks from the same space are Comtech Telecommunications Corp. (CMTL - Free Report) , Juniper Networks, Inc. (JNPR - Free Report) and Harris Corporation (HRS - Free Report) . While Comtech Telecommunications sports a Zacks Rank #1 (Strong Buy), Juniper Networks and Harris carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comtech Telecommunications exceeded estimates in each of the preceding four quarters, the average earnings surprise being 136.02%.
Juniper Networks surpassed estimates in each of the trailing four quarters, the average earnings surprise being 10.99%.
Harris outpaced estimates in each of the preceding four quarters, the average earnings surprise being 7.06%.
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