We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why Knowles (KN) Appears an Enticing Investment Option
Read MoreHide Full Article
Shares of Knowles Corporation (KN - Free Report) have risen 11.1% over the past six months, driven by healthy revenues on the back of a flexible business model and a quick time-to-market schedule to meet clients’ evolving needs. Earnings estimates for the current fiscal have increased 21% over the past year, implying robust inherent growth potential. With healthy fundamentals, this Zacks Rank #1 (Strong Buy) communication components manufacturer appears to be a solid investment option at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Image Source: Zacks Investment Research
Growth Drivers
Headquartered in Itasca, IL, Knowles is a premier provider of advanced micro-acoustic, audio processing and precision device solutions, serving the mobile consumer electronics, communications, medical, defense, automotive and industrial markets. Leveraging its leading position in MEMS (micro-electro-mechanical systems) microphones and strong capabilities in audio processing technologies, the company optimizes audio systems and improves user experience in mobile, ear and IoT applications. Knowles also offers acoustic components, high-end capacitors and mmWave RF solutions for diverse markets.
Voice-powered interactions are fast emerging as a critical and necessary feature as consumers tend to engage with technology through natural, spoken commands across the mobile, ear and IoT platforms. This has led to a wide proliferation of products ranging from mobile phones to headsets and smart speakers to household appliances. Knowles aims to capitalize on its unique capabilities in acoustics, digital signal processing and algorithms to cater to these demands. The acquisition of Audience further helped the company gain essential digital signal processing and algorithm capabilities. Strong business focus, disciplined capital management and continuous R&D (research & development) initiatives have helped Knowles command a leading market position in MEMS microphones, balanced armature speakers, edge processors, high-performance capacitors and radiofrequency filtering solutions. MEMS microphones are the smallest of their kind, with the highest signal-to-noise ratio at the lowest power, while the balanced armature speakers offer the greatest output at the lowest power.
Proprietary manufacturing techniques and global scale of operations have facilitated the company to fine-tune its business with the evolving customer demands and invest in high-value solutions. The transformation from an acoustic component supplier to an audio solutions provider has enabled the company to migrate to higher-value solutions and increase content per device. This, in turn, has empowered it to capitalize on the positive macro trends in audio and edge processing solutions.
Knowles boasts integrated design and manufacturing scale of operations. The company has a unique ability to balance and shift between full and semi-automation to optimize the efficiency of the operations and reduce operating expenses. For products introduced more than 18 months ago, Knowles strives to offset expected price erosion through bill of material cost reductions, yield improvements, equipment efficiency and movement to lower-cost manufacturing locations.
With a VGM Score of A, the stock delivered an earnings surprise of 14.9%, on average, in the trailing four quarters. The stock has a long-term earnings growth expectation of 10%.
Other Key Picks
Viavi Solutions Inc. (VIAV - Free Report) , carrying a Zacks Rank #2 (Buy), is a solid pick for investors. It delivered a modest earnings surprise of 15.6%, on average, in the trailing four quarters. Earnings estimates for the current year for the stock have moved up 10.8% since March 2021, while that for the next year is up 9.2%.
Viavi boasts a comprehensive product portfolio that offers end-to-end network visibility and analytics that help build, test, certify, maintain and optimize complex physical and virtual networks. Its wireless and fiber test solutions are in the early stages of a multi-year investment cycle fueled by the transition of OEMs and service providers to superfast 5G networks. Viavi expects growth to be driven by the secular demand for 5G wireless, fiber and 3D sensing.
TESSCO Technologies Incorporated , carrying a Zacks Rank #2, is another key pick. It delivered an earnings surprise of 55.4%, on average, in the trailing four quarters.
Earnings estimates for TESSCO for the current year have moved up 28.8% since March 2021. It offers products to the industry’s top manufacturers in mobile communications, Wi-Fi, wireless backhaul and related products. With over three decades of profound experience, TESSCO delivers complete end-to-end solutions to the wireless industry.
KVH Industries, Inc. (KVHI - Free Report) , carrying a Zacks Rank #2, is a solid pick. It delivered an earnings surprise of 20%, on average, in the trailing four quarters.
Despite global supply chain disruptions, KVH Industries is driving growth and margin expansion through new product introduction and subscriber migration to High-Throughput Satellites. The company aims to make decisive inroads into the still-nascent autonomous transportation markets with a strong balance sheet position and zero debt. If KVH Industries manages to effectively mitigate supply chain woes, there could be further room for cash flow expansion.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Shutterstock
Here's Why Knowles (KN) Appears an Enticing Investment Option
Shares of Knowles Corporation (KN - Free Report) have risen 11.1% over the past six months, driven by healthy revenues on the back of a flexible business model and a quick time-to-market schedule to meet clients’ evolving needs. Earnings estimates for the current fiscal have increased 21% over the past year, implying robust inherent growth potential. With healthy fundamentals, this Zacks Rank #1 (Strong Buy) communication components manufacturer appears to be a solid investment option at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Image Source: Zacks Investment Research
Growth Drivers
Headquartered in Itasca, IL, Knowles is a premier provider of advanced micro-acoustic, audio processing and precision device solutions, serving the mobile consumer electronics, communications, medical, defense, automotive and industrial markets. Leveraging its leading position in MEMS (micro-electro-mechanical systems) microphones and strong capabilities in audio processing technologies, the company optimizes audio systems and improves user experience in mobile, ear and IoT applications. Knowles also offers acoustic components, high-end capacitors and mmWave RF solutions for diverse markets.
Voice-powered interactions are fast emerging as a critical and necessary feature as consumers tend to engage with technology through natural, spoken commands across the mobile, ear and IoT platforms. This has led to a wide proliferation of products ranging from mobile phones to headsets and smart speakers to household appliances. Knowles aims to capitalize on its unique capabilities in acoustics, digital signal processing and algorithms to cater to these demands. The acquisition of Audience further helped the company gain essential digital signal processing and algorithm capabilities. Strong business focus, disciplined capital management and continuous R&D (research & development) initiatives have helped Knowles command a leading market position in MEMS microphones, balanced armature speakers, edge processors, high-performance capacitors and radiofrequency filtering solutions. MEMS microphones are the smallest of their kind, with the highest signal-to-noise ratio at the lowest power, while the balanced armature speakers offer the greatest output at the lowest power.
Proprietary manufacturing techniques and global scale of operations have facilitated the company to fine-tune its business with the evolving customer demands and invest in high-value solutions. The transformation from an acoustic component supplier to an audio solutions provider has enabled the company to migrate to higher-value solutions and increase content per device. This, in turn, has empowered it to capitalize on the positive macro trends in audio and edge processing solutions.
Knowles boasts integrated design and manufacturing scale of operations. The company has a unique ability to balance and shift between full and semi-automation to optimize the efficiency of the operations and reduce operating expenses. For products introduced more than 18 months ago, Knowles strives to offset expected price erosion through bill of material cost reductions, yield improvements, equipment efficiency and movement to lower-cost manufacturing locations.
With a VGM Score of A, the stock delivered an earnings surprise of 14.9%, on average, in the trailing four quarters. The stock has a long-term earnings growth expectation of 10%.
Other Key Picks
Viavi Solutions Inc. (VIAV - Free Report) , carrying a Zacks Rank #2 (Buy), is a solid pick for investors. It delivered a modest earnings surprise of 15.6%, on average, in the trailing four quarters. Earnings estimates for the current year for the stock have moved up 10.8% since March 2021, while that for the next year is up 9.2%.
Viavi boasts a comprehensive product portfolio that offers end-to-end network visibility and analytics that help build, test, certify, maintain and optimize complex physical and virtual networks. Its wireless and fiber test solutions are in the early stages of a multi-year investment cycle fueled by the transition of OEMs and service providers to superfast 5G networks. Viavi expects growth to be driven by the secular demand for 5G wireless, fiber and 3D sensing.
TESSCO Technologies Incorporated , carrying a Zacks Rank #2, is another key pick. It delivered an earnings surprise of 55.4%, on average, in the trailing four quarters.
Earnings estimates for TESSCO for the current year have moved up 28.8% since March 2021. It offers products to the industry’s top manufacturers in mobile communications, Wi-Fi, wireless backhaul and related products. With over three decades of profound experience, TESSCO delivers complete end-to-end solutions to the wireless industry.
KVH Industries, Inc. (KVHI - Free Report) , carrying a Zacks Rank #2, is a solid pick. It delivered an earnings surprise of 20%, on average, in the trailing four quarters.
Despite global supply chain disruptions, KVH Industries is driving growth and margin expansion through new product introduction and subscriber migration to High-Throughput Satellites. The company aims to make decisive inroads into the still-nascent autonomous transportation markets with a strong balance sheet position and zero debt. If KVH Industries manages to effectively mitigate supply chain woes, there could be further room for cash flow expansion.