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ADTRAN to Boost Customer Relationship With SmartRG Buyout

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In order to augment its broad portfolio of software network solutions globally, ADTRAN, Inc. (ADTN - Free Report) recently announced that it has acquired SmartRG Inc. — a Vancouver, WA-based company. It develops and provides carrier-class, open-source connected home platforms and cloud services for broadband service providers. The terms of the deal were not disclosed. The buyout is part of ADTRAN’s commitment to help its broadband customers to lower operating expenses, and simplify and scale networks, while enhancing revenues by creating long-lasting relationships with them.

Notably, SmartRG has more than 3 million devices in service and above 1.3 million devices under management in North America, the Caribbean and South America. The company expects to drive growth through its software solutions as more customers shift from proprietary options to SmartOS — its open-source, cloud-enabled solution suite. SmartRG’s executive team and employees will help to ensure a seamless transition and enhanced market share growth, while leveraging ADTRAN’s global footprint. The acquisition positions ADTRAN and SmartRG well to capitalize on growing global market trends.

Both companies have delivered solutions based on open, programmable and scalable designs that interoperate and manage other devices as the market shifted toward Software-Defined Networking. The combination will enable broadband providers to improve subscriber experience from the access network into any home or business. ADTRAN Mosaic and Smart OS provide end-to-end management and orchestration solutions from cloud edge to subscriber edge.

The fiber access market is anticipated to grow exponentially, driven by greater broadband requirements for connected homes and businesses. According to IDC’s Worldwide Quarterly Smart Home Device Tracker, all categories of smart home devices are expected to deliver double-digit growth through 2022. ADTRAN remains focused on being a top global supplier of access infrastructure and related value-added solutions from the cloud edge to the subscriber edge. We believe that such acquisitions will help the company boost its leadership position.

The stock has outperformed the industry with an average loss of 14.3% compared with decline of 29.2% for the latter in the past six months.

ADTRAN currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the broader industry include QUALCOMM Incorporated (QCOM - Free Report) , Ubiquiti Networks, Inc. (UBNT - Free Report) and Juniper Networks, Inc. (JNPR - Free Report) . While Qualcomm and Ubiquiti sport a Zacks Rank #1 (Strong Buy), Juniper carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.               

Qualcomm has a long-term earnings growth expectation of 11.5%. It beat earnings in each of the trailing four quarters, the average being 18.5%.          

Ubiquiti has a long-term earnings growth expectation of 14%. It surpassed earnings estimates in three of the trailing four quarters, the average positive surprise being 11.3%.

Juniper has a long-term earnings growth expectation of 5.5%. It beat earnings estimates in each of the trailing four quarters, the average being 11%.          

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