William Blair's Jason Ader, who is reiterating an Outperform, says meetings with Ruckus' management left his firm with "increased confidence" in Ruckus' (RKUS +2.7%) medium/long-term ability to benefit from growing carrier Wi-Fi deployments.
Ader thinks carrier Wi-Fi is turning into a two-horse race involving Ruckus and Cisco (Aruba, Alcatel-Lucent, and Ericsson also compete), and that Ruckus is gaining enterprise Wi-Fi share. He also sees adoption of the Hotspot 2.0 standard (enables automatic discovery/login for carrier and public Wi-Fi networks) acting as a 2014 catalyst.
Ruckus and rival Aruba (ARUN +0.7%) outperformed yesterday after Cisco (CSCO -0.9%) reported its Y/Y Wi-Fi hardware growth accelerated in the July quarter. Cisco also mentioned on its CC its recently-acquired Meraki enterprise Wi-Fi unit (a major Aruba rival) saw 100%+ Q/Q order growth, and is now on a $250M+/year order run rate.