Ever thought about the potential of buying 5G stocks roughly at their lowest prices? This move could be a game-changer.
Some stocks are undervalued, not due to poor fundamentals but because of temporary market conditions. And so, this strategy capitalizes on the natural ebb and flow of perceptions, where you can buy low and, potentially, sell high as the outlook improves.
Interestingly, the 5G services industry is predicted to grow from $98.3 billion in the past year to more than $427 billion in 2028. This amounts to a compound annual growth rate (CAGR) of around 34% throughout that period. These superb numbers highlight the importance of keeping an eye on 5G equities.
In this case, passing up the chance to invest in these three 5G companies while their prices are relatively low would mean missing out on a large chunk of future technology domination. These 5G stocks present solid cases for why adding them to your portfolio now could prevent regrets down the road.
Rogers Communications (RCI)
Rogers Communications (NYSE:RCI) is one of Canada’s telecom heavyweights and has over 11.5 million wireless subscribers, accounting for about 29% of the Canadian population.
Rogers has efficiently used its 5G capabilities to recruit new customers. Despite tough year-over-year (YoY) comparisons, the business attracted 98,000 postpaid mobile phone subscribers in the first-quarter — a bump of 3,000. This illustrates its capacity to expand even in a highly competitive market.
Their financial performance has also been solid, with a 1.5% rise in average revenue per user (ARPU). More importantly, consolidated adjusted EBITDA increased by 34%, with a 210-basis-point surge in adjusted EBITDA margins. These data demonstrate the benefits of internal efficiency and synergies inside the company.
Rogers’ stock is selling at $37.5 (as of now), down 14% in the last year. TipRanks analysts, on the other hand, are bullish, giving it a ‘Strong Buy’ rating and projecting a 33.5% upside potential. This positive forecast demonstrates confidence in Rogers’ expansion, making it an appealing investment option at its low valuation.
Cisco Systems (CSCO)
Cisco Systems (NASDAQ:CSCO) has long been a networking and digital infrastructure leader, providing exceptional service to public sectors and governments. Its private 5G networks, critical for high-performance and secure connection, demonstrate its dedication to quality and reliability.
Despite trading around its 52-week lows, Cisco presents itself as worthy of consideration. Its forward price-to-earnings (P/E) ratio of 18.5 is notably lower than the industry median of 30.72, indicating a robust potential for growth. Additionally, one of Cisco’s standout features is its profitability. For example, it boasts an excellent trailing year net income margin of 21.8%, dwarfing the sector average of 3.10%.
Lastly, the anticipated boost from the rollout of 5G wireless networks has yet to materialize as a growth catalyst for Cisco. But there is optimism on the horizon. Cisco’s collaboration with Dish Network, an indirect subsidiary of EchoStar Corporation (NASDAQ:SATS), to market 5G commercial services to major corporations is an encouraging development. In fact, TipRanks experts forecast a 15.5% upswing in Cisco’s price, signaling that investors are optimistic about the company’s future.
Iridium Communications (IRDM)
Iridium (NASDAQ:IRDM) now employs a variety of Low-Earth Orbit (LEO) satellites to deliver voice and data communication services to people worldwide. This satellite technology enhances 5G networks by providing a global connection to underserved places.
Iridium is taking a huge step forward by aiming to make its LEO network 5G compatible with mass-market handsets by 2026. This will enable communications and SOS services beyond cellular networks, expanding the use of 5G.
Financially, despite a small revenue drop, Iridium beat analyst projections. Remarkably, profitability improved significantly across various metrics. For example, net income more than doubled, going from $9.8 million to $19.7 million. Operating cash flow rose from $68.9 million to $71.4 million, demonstrating the company’s increasing financial stability and operational efficiency.
Furthermore, IRDM stock trades at an affordable $26.39, a nosedive of almost 56% annually. I think this presents an attractive buying opportunity, especially with TipRanks analysts predicting a whopping 40.2% upside potential from this point.
On the date of publication, Nabeel Bukhari did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.