Sliding edge router market share could erode share price, tracker notes
Trefis, a modeling tool developed by MIT engineers and Wall Street analysts to gauge the impact of products on a company’s stock price, calculated the impact of sliding edge router market share on Cisco. It states that there could be a 2% negative impact to Cisco’s stock if it continues losing edge router market share to Alcatel-Lucent, which has been gaining share at the expense of both Cisco and Juniper.
Citing data from Dell’Oro Group, Trefis notes Alcatel-Lucent is the only major vendor to gain market share in the worldwide service provider router market in 2009. It even bumped Juniper from the No. 2 spot in edge routers, a position Juniper held for nine years, according to Dell’Oro.
Both Juniper and Cisco have lost about five percentage points of edge router market share over the past four years while Alcatel-Lucent has gained share, Trefis notes. At that rate, the decline in market share could erode Cisco’s stock price by 2%, according the Trefis forecast.
But the Trefis team expects Cisco’s share to remain stable going forward, which – if we manipulated its sample table correctly – would not show any depreciation in the stock price.
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