LitePoint, a subsidiary of Teradyne, Inc. TER, recently launched the industry's first fully-integrated 5G millimeter wave test solution, IQgig-5G. The test solution simplifies design validation for 5G product developers and speeds up product development.
The system works with both 28 GHz and 39 GHz 5G millimeter wave bands and its multiple RF ports streamline measuring signals with both horizontal and vertical polarizations. The test solution also makes RF measurements easier for both conducted and over-the-air.
As the world advances toward 5G millimeter wave spectrum, there is a need to develop and understand the performance of 5G millimeter wave products, spanning from semiconductors to end systems. The test solution presently supports only pre-5G modulation standard but can be upgraded to support 3GPP NR standards. The initial 3GPP ‘5G’ is not expected to be available until 2019 and its widespread commercial usage is not expected before 2020s.
Notably, shares of Teradyne have gained 69.3% year to date, outperforming the 48.3% rally of the industry it belongs to.
5G Millimeter Wave Spectrum
5G millimeter wave spectrum is expected to enhance mobile broadband speeds and support extensive mobile data usage. The spectrum is considered by many organizations and researchers and can be used for high-speed wireless communications to deliver faster, higher-quality video, and multimedia content and services.
The need for high frequency spectrums is on the rise as the new generation of computers and smartphones demand higher data usage. Ted Rappaport, founding director of NYU Wireless, expects mobile data traffic to rise 53% every year in the near future. As more devices support 5G, the need for LitePoint’s test solutions will grow thereby boosting Teradyne’s top line growth.
Teradyne, Inc. Revenue (TTM)
Teradyne, Inc. Revenue (TTM) | Teradyne, Inc. Quote
Our Take
LitePoint is well positioned in the fast-growing wireless testing market. LTE, LTE Advanced and 802.11ac adoption is expected to accelerate and this combined with new standards like NFC testing and fully-integrated 5G millimeter wave test solution will increase the opportunities for the company. Further, a proliferation of reliable, high-bandwidth connections in vehicles over the next five years will be another driver of test intensity as quality and reliability of these connections will be dominant. The company is also set to benefit from new developments in Internet of things. All of these indicate healthy top-line growth.
Zacks Rank & Stocks to Consider
Teradyne has a Zacks Rank #3 (Hold).
Intel Corporation INTC, IPG Photonics Corporation IPGP and NVIDIA Corporation NVDA are some of the better-ranked stocks in the broader technology sector. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for Intel, IPG Photonics and NVIDIA is currently projected to be 8.4%, 12% and 10.3%, respectively.
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