On January 11th, Craig Hallum Capital Group issued a Buy rating on Ruckus Wireless, with a revised upward price target of $26.00.
With respect to small cell developments, the authors note that "[t]wo specific announcements at CES - one by the FCC to relieve congestion in Wi-Fi networks ahead of the Gigabit Wi-Fi 11ac launch and one by ATT confirming our belief that Wi-Fi will be part of all of its scheduled 40,000 small-cell deployments over the next two years - reinforce our confidence that we are in the early stages of a very significant secular growth trend in Carrier Wi-Fi. "
Moreover, the authors surmise that Ruckus is in a unique position to differentiate itself from competitors, as, "limited backhaul availability and standards maturity are the top two factors limiting more rapid deployments of small cells…[and we] believe Ruckus, with its SmartCell API's which feature integrated Wi-Fi access points, a USB slot for pico or femto small cells and 5MHz Wi-Fi backhaul, could be a compelling solution to the backhaul problem as Carriers complete their trials."
A future competitive advantage, the authors believe is "the SmartCell Gateway product from Ruckus (currently in trials) [which] could be a big driver of competitive differentiation in upcoming months as more Carriers try to procure systems that integrate seamlessly with their cellular networks. We also believe the ratification of HotSpot 2.0 and Passpoint 2.0 standards could also be major drivers for small cells and Carrier Wi-Fi in the future."
Accordingly, the authors conclude that Ruckus faces potentially strong growth prospects, noting that "Ruckus, given its considerable product differentiation aligned with the needs of the Carrier Wi-Fi market, its first mover advantage in the Carrier Wi-Fi market both in terms of its Carrier relationships and products (SmartCell AP with Wi-Fi backhaul, SmartCell Gateway) and significant mindshare is likely to benefit disproportionately from this trend."