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1. Company Snapshot

1.a. Company Description

Spirent Communications plc provides automated test and assurance solutions for networks, cybersecurity, and positioning in the Americas, the Asia Pacific, Europe, the Middle East, and Africa.The company operates in Lifecycle Service Assurance and Networks & Security segments.The Lifecycle Service Assurance segment provides testing solutions for 5G mobile core networks, and cellular and Wi-Fi devices in the lab, as well as diagnoses, troubleshoots, and resolves issues with production networks and services.


The Networks & Security segment develops test methodologies, tools, and services for virtualised networks, cloud, and proactive security validation; and offers Ethernet/IP performance testing solutions, as well as provides navigation satellite system test and simulation solutions while addressing opportunities in the broader positioning, navigation, and timing market.The company was formerly known as Spirent plc and changed its name to Spirent Communications plc in May 2006.Spirent Communications plc was founded in 1936 and is headquartered in Crawley, the United Kingdom.

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1.b. Last Insights on SPT

Spirent Communications plc's recent performance was driven by the proposed acquisition by Keysight Technologies, Inc. The acquisition, announced on March 28, 2024, is expected to be completed through a Court-sanctioned scheme of arrangement. This development has likely generated interest in the company, as investors consider the potential benefits of the acquisition. Additionally, Spirent's focus on high-growth tech solutions, as highlighted in recent market analysis, positions the company for resilience in a challenging economic environment. The company's ability to innovate and adapt to market uncertainties is a key driver of its recent performance.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Form 8.3 - Spectris plc

Oct -16

Source:

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VIAVI Closes Acquisition of Spirent Communications plc's High-Speed Ethernet, Network Security and Channel Emulation Testing Business

Oct -16

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Keysight Technologies Completes Acquisition of Spirent Communications PLC

Oct -15

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Form 8.3 - Alphawave IP Group plc

Oct -15

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Form 8.3 - Dowlais Group PLC

Oct -14

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Form 8.3 - Spirent Communications PLC

Oct -13

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Form 8.3 - Dowlais Group plc

Oct -10

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Spirent Brings Industry-First Benchmarking to Cloud-Native Infrastructure Testing

Oct -09

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.63%)

6. Segments

Networks & Security

Expected Growth: 4.5%

Spirent Communications plc's Networks & Security segment growth of 4.5% is driven by increasing demand for 5G network testing, cybersecurity threats, and digital transformation. The rise of IoT devices and cloud computing also fuels growth, as companies require robust security solutions to protect against cyber-attacks. Furthermore, government initiatives for network infrastructure development and investments in 5G technology contribute to the segment's growth.

Lifecycle Service Assurance

Expected Growth: 4.8%

Spirent's Lifecycle Service Assurance growth driven by increasing demand for 5G network assurance, expansion into new markets, and strategic partnerships. Growing adoption of cloud-based services and IoT devices fuels need for service assurance, while 5G network densification and edge computing create opportunities for Spirent's solutions.

7. Detailed Products

CyberFlood

A security and performance testing solution for networks, applications, and devices

CyberFlood Security

A security testing solution for identifying vulnerabilities and weaknesses in networks and applications

Lanscope

A network performance monitoring and troubleshooting solution

TestCenter

A network testing and validation solution for network equipment manufacturers and service providers

Velocity

A network performance testing and validation solution for data centers and cloud infrastructure

iTest

A automated testing and validation solution for network equipment and services

VisionWorks

A network performance monitoring and analytics solution

TTworkbench

A testing and validation solution for network equipment manufacturers and service providers

8. Spirent Communications plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Spirent Communications plc operates in a niche market, and there are limited substitutes for its products and services. However, the company faces competition from other companies that offer similar products and services.

Bargaining Power Of Customers

Spirent Communications plc has a diverse customer base, and no single customer accounts for a significant portion of its revenue. This reduces the bargaining power of customers.

Bargaining Power Of Suppliers

Spirent Communications plc relies on a few key suppliers for its components and materials. While the company has some bargaining power, its suppliers also have some leverage.

Threat Of New Entrants

The telecommunications testing and analytics industry has high barriers to entry, including significant capital expenditures and regulatory hurdles. This makes it difficult for new entrants to enter the market.

Intensity Of Rivalry

The telecommunications testing and analytics industry is highly competitive, with several established players competing for market share. Spirent Communications plc faces intense competition from its rivals.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 5.39%
Debt Cost 3.95%
Equity Weight 94.61%
Equity Cost 6.61%
WACC 6.47%
Leverage 5.69%

11. Quality Control: Spirent Communications plc passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
F-Secure

A-Score: 4.8/10

Value: 5.5

Growth: 4.2

Quality: 8.1

Yield: 3.1

Momentum: 1.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Spirent Communications

A-Score: 4.1/10

Value: 0.8

Growth: 1.7

Quality: 5.1

Yield: 3.1

Momentum: 7.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Radware

A-Score: 3.6/10

Value: 1.2

Growth: 3.6

Quality: 6.1

Yield: 0.0

Momentum: 6.5

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Cognyte Software

A-Score: 3.4/10

Value: 3.6

Growth: 4.7

Quality: 4.1

Yield: 0.0

Momentum: 6.5

Volatility: 1.3

1-Year Total Return ->

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Stock-Card
XBP Europe Holdings

A-Score: 3.3/10

Value: 8.7

Growth: 1.6

Quality: 4.2

Yield: 0.0

Momentum: 5.5

Volatility: 0.0

1-Year Total Return ->

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Stock-Card
HUB Cyber Security

A-Score: 3.3/10

Value: 9.8

Growth: 0.9

Quality: 5.0

Yield: 0.0

Momentum: 4.0

Volatility: 0.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

1.99$

Current Price

1.99$

Potential

-0.00%

Expected Cash-Flows