Vuzix Corp: Hidden 5G Stock Delivering Enormous Returns

If You Ignore This Tech Stock, You Might Kick Yourself Later

“If the company can keep up its growth momentum, I wouldn’t be surprised to see VUZI stock soar to new highs.”

That’s what I told Profit Confidential readers about Vuzix Corp (NASDAQ:VUZI) earlier this year when it started getting more investor attention. In that piece, I explained why Vuzix stock could see substantial upside thanks to the booming augmented reality (AR) industry.

Since early February, when that article was published, VUZI stock has returned another 49% (as of this writing).

And here’s the neat part: other than being a top AR play, Vuzix deserves attention as a 5G stock.

You see, having been around since 1997, Vuzix Corp is one of the pioneers of AR technology. Today, it’s a leading supplier of smart glasses and AR technologies and products for the consumer and enterprise markets.

Headquartered in West Henrietta, NY, the company holds 192 patents and patents pending, plus numerous intellectual property (IP) licenses in the video eyewear field.

Vuzix Corp supplies a broad range of AR solutions. For instance, its “M-Series” smart glasses serve the rapidly emerging enterprise market. Its “Blade” smart glasses serve the enterprise, security, first responders, and prosumer markets. The company also offers custom original equipment manufacturer (OEM) solutions in multiple industries.

Vuzix’s smart glasses can help with barcode scanning and order picking in warehouses, facilitate work instructions in manufacturing, and provide remote support for field service workers.

Vuzix Corp’s AR products have also been used in the health-care sector. The company’s “M400” smart glasses allow frontline workers in operating rooms to provide 4K broadcast-quality imagery to others while interacting with patients and staff from a safe distance.

All these applications are very exciting, but they require data transmission. And that’s where 5G comes into play. With a data transmission speed of up to 100 times faster than 4G and ultra-low latency, 5G networks could lead to wider adoption of AR smart glasses across industries.

In fact, Vuzix Corp has already been working with telecommunications companies, including Verizon Communications Inc. (NYSE:VZ), one of the largest wireless carriers in the U.S.

Notably, Vuzix’s M400 and “M4000” smart glasses now support “BlueJeans” by Verizon, a global remote collaboration platform with a smart-glasses interface for Verizon’s internal and external customer sales programs.

To us consumers, AR isn’t quite in our lives yet, but Vuzix’s smart glasses are already well-received in the enterprise world. That means the company is already churning out impressive financials.

In 2020, Vuzix generated $11.6 million of total revenue, up by 74% from 2019. The top-line increase was due to higher sales of both smart glasses and engineering services. (Source: “Vuzix Reports Record 4Q and Full Year Smart Glasses Revenues,” Vuzix Corp, March 15, 2021.)

In the first quarter of 2021, Vuzix’s revenue totaled $3.9 million, representing a whopping 160% from the $1.5 million earned in the year-ago period. (Source: “Vuzix Reports Record Smart Glasses Revenues in 1Q21,” Vuzix Corp, May 10, 2021.)

In particular, sales of the company’s smart glass products surged by 177% year-over-year to $2.4 million. Management noted that there was an increasing number of customers placing larger and more frequent orders for Vuzix’s smart glasses.

Ultimately, we’re still in the early days of 5G adoption, and the growth story for Vuzix stock could just be getting started.

At a conference call earlier this year, the company’s chief executive officer, Paul Travers, said, “Ultimately, 5G network offerings with their low latency and powerful edge computing capabilities should allow us to offer AR smart glasses that are truly comfortable and stylish to wear in the coming future.” (Source: “Vuzix Corporation (VUZI) CEO Paul Travers on Q4 2020 Results – Earnings Call Transcript,” Seeking Alpha, March 15, 2021.)

Vuzix Corp (NASDAQ:VUZI) Stock Chart

Chart courtesy of StockCharts.com

Analyst Take

At the end of the day, Vuzix stock is mostly known as an AR stock. So, changes in investor sentiment toward the AR sector could lead to some volatility in the company’s share price. After all, VUZI stock already skyrocketed over the past year.

But given the tailwind that 5G is going to bring to Vuzix Corp’s business, I’d say further returns could be on the horizon.