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Valens Research

COMM - Embedded Expectations Analysis - 2020 04 17

 CommScope Holding Company, Inc. (COMM:USA) currently trades well below corporate averages relative to UAFRS-based (Uniform) earnings, with an 11.2x Uniform P/E, implying bearish expectations for the firm, and management appears concerned about their growth, client relationships, and carrier spending declines

 Specifically, management may lack confidence in their ability to sustain growth in their adjusted EBITDA margins and Broadband Networks segment. Furthermore, they may be overstating the strength of their positioning as a service provider, the potential of Wi-Fi 6 in cloud-based architectures, and growth opportunities stemming from the
T-Mobile-Sprint merger. Moreover, they may have concerns about the CBRS Alliance, continued Home Network carrier subscriber losses, and their relationship with AT&T. Finally, they may be concerned about North American carrier spending declines and the sustainability of their digital DAS solution revenue growth
Underlying
CommScope Holding Co. Inc.

CommScope Holding is a provider of infrastructure solutions for communication networks. The company's solutions and services for wired and wireless networks enable high-bandwidth data, video and voice applications. The company's operating segments are: CommScope Connectivity Solutions (CCS) and CommScope Mobility Solutions (CMS). The CCS segment is engaged in providing fiber optic and copper connectivity solutions for use in data centers and business enterprise, telecommunications, cable television and residential broadband networks. The CMS segment is engaged in providing infrastructure for wireless networks.

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