Motley Fool  Jul 19  Comment 
Sierra Wireless is a top Internet of Things stock, but it’s also overvalued.
Cellular News  Jul 19  Comment 
Sierra Wireless (NASDAQ: SWIR) (TSX: SW), the leading provider of fully integrated device-to-cloud solutions for the Internet of Things (IoT), today announced that Marc Overton has been appointed Senior Vice President andamp;...
Motley Fool  Jul 17  Comment 
Check out these five lesser-known facts about this “pure play” on the IoT market.
Motley Fool  Jul 7  Comment 
Take a closer look at the business states of these two top Internet of Things stocks.
Motley Fool  Jul 1  Comment 
This Fool loves this Internet of Things stock, but it always pays to be cautious.
Cellular News  Jun 28  Comment 
Sierra Wireless (NASDAQ: SWIR) (TSX: SW), the leading provider of fully integrated device-to-cloud solutions for the Internet of Things (IoT), today announced the industry's first global, dual-mode Low Power Wide Area (LPWA)...
Motley Fool  Jun 22  Comment 
Both companies are solid plays in the Internet of Things and machine-to-machine communications spaces.
Motley Fool  Jun 21  Comment 
Is this IoT “pure play” too hot to handle?
Motley Fool  Jun 20  Comment 
Both chipmakers have enjoyed terrific gains, but which one is a better bet? It might depend on your tolerance for risk.
Motley Fool  Jun 13  Comment 
NVIDIA shares have more than tripled in 52 weeks. These three stocks might be able match that incredible performance.


Corporate Profile and Strategy

Based in British Columbia, Canada, Sierra Wireless Inc. (SWIR) develops and markets wireless solutions, including data modems for portable computers (PC), embedded modules for original equipment manufacturers (OEMs), rugged vehicle-mounted modems, and mobile phones. Sierra's customers include Lenovo, Panasonic, Toshiba, Hewlett Packard, Hitachi, iPass, Ingram Micro, AT&T, Verizon, Sprint, T-Mobile, Handspring/Palm, and others. Its most popular product is the AirCard, which enables portable computers such as notebooks and personal digital assistants (PDAs) to access the Internet over existing wireless phone networks. Revenue by product segments in the third quarter of 2007 was: 65% from PC Aircards, 25% from OEM/embedded modules, 9% from machine-to-machine & mobile products, and 1% from Other sources. For the third quarter of 2007, the company derived 72% of its revenue from the Americas, 8% from Europe, and 20% from the Asia-Pacific region. Technology wise, in the third quarter, 46% was GSM sales, 53% was CDMA sales, and the remaining 1% was from the Other category.

Investment Thesis

3G Network Deployment: Continued global channel expansion and strong OEM design wins have established Sierra as a market leader in the wireless PC cards and modems market. The company received orders for embedded module designs from twelve PC OEMs, including HP, Lenovo, Fujitsu Siemens, Panasonic, AsusTek, Dialogue, and Itronics. Out of this nine companies have already launched embedded products of Sierra. All cards are to be compatible with 3G wireless networks around the world. Furthermore, the company has successfully shifted existing large customers to its next-generation products and started shipping new EV-DO Revision A AirCard 595 to Verizon and Sprint-Nextel, and 3.6 mbps HSDPA (High Speed Downlink Packet Access) AirCard 875 to AT&T. Higher data rates are expected to improve overall consumer acceptance of the wireless data access offerings. Recently, Sprint Nextel launched new EV-DO USB modems by Sierra Wireless to be used in its mobile broadband network. This new series of USB products expands the addressable market space for the company.

Geographical and Client-Base Expansion: Sierra continues to diversify its business prospects on a global basis. According to ABI Research, the market for mobile modems may reach up to $10 billion by 2010, which represent a compounded annual growth rate of 47%. Over 35 networks are using Sierra's AirCard products. The company now markets and sells AirCard 850/875 to Orange UK, O2 in the UK, Weiss Telecom in France, and Telefonica in Spain. In addition, Sierra is selling HSDPA AirCard to Debitel in Germany, Oi and Orange in France, O2 and Orange in the UK, Swisscom, Sunrise in Switzerland, and Telefonica in Spain. Moreover, Sierra Wireless started shipment of AirCard 875/595 to Telstra (Australia) and to Telecom New Zealand. Market data shows that there exist 130 HSDPA networks implemented in over 60 different countries. On the equipment networking side, Cisco Systems has also integrated Sierra's embedded modules into its new 3G wide area network routers. These initiatives represent the company's diligence in spreading its sales focus to reduce selling concentration away from a limited number of customers it relied on in the past.

New Product Launch: Sierra Wireless introduced a series of AirCards, called ExpressCard and USB wireless modems specifically designed for 3G EV-DO Revision A and HSDPA networks. The company's current next-generation product, HSDPA card, is backward compatible with GSM, GPRS, and EDGE. The company received several purchase commitments for these high-margin products from major operators. According to In-Stat, an information services company focused on personal computers and high-performance microprocessor industry statistics, the market for embedded wireless EV-DO and HSDPA connectivity modules in laptops is expected to grow to approximately 4.5 million units by 2008. To comprehensively address this market, Sierra Wireless launched a series of high-margin 3G rugged mobile products and has specifically targeted the Japanese market. The company's recent acquisition of Airlink also supports this effort. Sierra Wireless started commercial shipment of its next-generation 3G HSUPA AirCards at the end of the third quarter 2007. The company already secured launch commitments for this card from major operators in the U.S., Asia, and Europe.

Strong Finance: Sierra Wireless' financial position remains strong, capable of sustaining near-term expenses and possible fluctuations in sales. At the end of the third quarter, the company had $3.55/diluted share of cash & cash equivalent and no debt outstanding. We believe gross margins may improve moving forward as the company changes its product-mix with the introduction of higher margin machine-to-machine products. In the reported quarter, Sierra achieved its stated objective of above 10% operating margin, much earlier than its target time frame. Over the near-term, management's guidance for the fourth quarter of 2007 is also encouraging, which exceeded initial consensus revenue and earnings estimates. Recently, the company completed a syndicate deal with underwriters through which Sierra received gross proceeds of $85.1 million by means of selling 2.8 million of its own common shares from treasury. Net proceeds from this offering will be spent on general corporate purposes, working capital and potential future acquisitions.


Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki