Friday, March 10, 2006
Cisco's New Opportunity With SyPixx
RBC Capital Markets analyst Mark Sue maintained an "outperform" rating and $23 price target on Cisco Systems in light of the company's recent acquisition of video surveillance company SyPixx Networks.
"Cisco made the acquisition to capitalize on the trend that has been underway which is moving video surveillance from analog to IP," wrote the analyst in a research note Wednesday.
Under the terms of the agreement, Cisco (nasdaq: CSCO - news - people ) will pay $51 million in cash and options for SyPixx, which offers network-centric video surveillance software and hardware. The acquisition is expect to close by the end of Cisco's fiscal third-quarter 2006.
Currently, SyPixx's success has mostly been in the casino gaming segment, as well as retail, transportation and state and local governments. Cisco plans to expand this and focus on the large enterprise market segment including finance, transportation and school districts.
Cisco believes the overall market opportunity in 2007 is estimated at $2 billion and has been growing at a 40% year-over-year rate for the past several years.
"Shopping ensues when the environment is improving and we believe things seem to be on an upswing for Cisco," said Sue.
source:http://www.forbes.com/markets/economy/2006/03/08/cisco-systems-sypixx-0308markets12.html
