COMM - Embedded Expectations Analysis - 2021 09 02
CommScope Holding Company, Inc. (COMM:USA) currently trades well below corporate averages relative to UAFRS-based (Uniform) earnings, with a 11.1x Uniform P/E, implying bearish expectations for the firm. Although management may have concerns about supply chain headwinds, revenue growth, and CommScope NEXT, market expectations are overly bearish, suggesting equity upside is likely.Specifically, management may lack confidence in their ability to implement best-in-class procurement, use CommScope NEXT to unlock a new level of shareholder value, and achieve significant CommScope NEXT cost savings. They may also have concerns about their current cash flow position along with supply chain, chip pricing, and lead time headwinds. Additionally, management may lack confidence in their ability to sustain Outdoor Wireless Networks revenue growth, continue driving growth in the North America and Asia Pacific regions, and use C-band to accelerate the 5G transition. They may also have concerns about the sustainability of PowerShift demand and increased spending activity in structured cabling for enterprise, multi-tenant and hyperscale networks.
Although management may have concerns about supply chain headwinds, revenue growth, and CommScope NEXT, market expectations are overly bearish given the firm's position to benefit from massive investments in 5G, suggesting equity upside is likely
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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