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Here's Why Investors Should Retain Windstream (WIN) Stock

Zacks Equity Research

On Sep 11, we issued an updated research report on Windstream Holdings Inc. WIN, a leading local exchange carrier in the United States.

Notably, this Zacks Rank #3 (Hold) company is leaving no stone unturned to deliver best-in-class performance that customers can depend upon when connecting to Cloud Service Providers. Recently, it also introduced a wide range of connectivity options for its cloud customers, thus enhancing its Cloud Connect solution.

In fact, Windstream has adopted a number of steps to expand its business. Also, it is coping with the growing demand for highly secure, reliable and dedicated access to cloud resources from customers all over the nation.

Of late, this local exchange carrier launched cloud-to-cloud disaster recovery management solutions that replicate mission-critical virtual servers and data to provide an alternative system for cloud-based disaster recovery to customers. Furthermore, the company deployed Infinera Cloud Xpress to enable effective service of its data center interconnect customers.

Meanwhile, Windstream merger with EarthLink Holdings Corp. earlier this year has boosted its SD-WAN (software-defined wide area network) suite. The deal has also strengthened the company’s footprint, taking the total count to 145,000 route miles, in Southeast and Northeast United States. Going forward, the merged entity is expected to save around $125 million in operating and capital expenses annually.

Additionally, expansion of the company’s metro fiber network business in Atlanta, Minneapolis, Philadelphia, St. Louis, Cleveland, Dallas, Chicago, Little Rock, Detroit, Indianapolis and Knoxville bodes well.

Markedly, the company’s focus on improving sales, cutting cost and planning pricing initiatives, which are expected to lead to profits and check churn is impressive.

However, shares of Windstream have declined 68.5% compared with the industry‘s fall of 11.2% in the past six months. The company has been losing access lines due to pricing pressure and fierce competition. Moreover, continuous investments in technology and network upgrades are other near-term risks.



Stocks to Consider

Investors interested in the broader Computer and Technology sector may consider better-ranked stock like Arista Networks, Inc. ANET, America Movil SAB AMX and Motorola Solutions, Inc. MSI.

Arista Networks currently sports a Zacks Rank #1 (Strong Buy) and projects earnings per share (EPS) growth rate of 19.3% in the next three to five years. You can see the complete list of today’s Zacks #1 Rank stocks here.

America Movil and Motorola Solutions currently holds a Zacks Rank #2 (Buy). Both the companies expect EPS growth rate of 55.9% and 5.2%, respectively, in the next three to five years. 

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