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CommScope (COMM) Unveils Wi-Fi 6 SMD & IP Client Platforms

Zacks Equity Research

CommScope Holding Company, Inc. COMM recently announced that it has introduced two next-gen additions to its Reference Design Kit (RDK) Video Accelerator portfolio. A Smart Media Device (SMD) platform 7852 featuring Wi-Fi 6 connectivity and an IP Client VIP7802 with Wi-Fi 6. The move is seen to be a big step forward for connected home entertainment coupled with exciting implications for a range of services.

The new platforms have been jointly developed by CommScope and RDK Management — an open source consortium that manages RDK for the global community. These support RDK for video development, enabling operators to accelerate time-to-market with 4K video experiences, customized user experiences and web-based applications.

CommScope’s RDK Video Accelerator is commercially available for service providers. Interestingly, the accelerator’s expanding portfolio offers a range of devices that come pre-installed with the latest version of RDK open source software, the Metrological App Store and tools to customize services.

Markedly, both platforms are equipped with the latest Wi-Fi 6 technology for fast, high-reliability, low-latency service delivery. Also, each device features the latest AOMedia Video 1 and high dynamic range technologies to enable the streaming video experiences in vivid 4K throughout the home.

Backed by continual innovations and contributions with RDK, CommScope’s new SMD and IP client platforms will likely redefine the entertainment experiences. The two new platforms provide a foundation of future technologies to the company’s vision for connected home experiences and applications.

CommScope has long-term earnings growth expectation of 16.3%. The stock has lost 26.2% against the industry’s growth of 19% in the year-to-date period. It beat earnings estimates thrice in the trailing four quarters, the average positive surprise being 11.3%.

The company is dealing with lower-than-expected performance in the connectivity solutions business. It expects to benefit from favorable networking market dynamics and anticipates improving trends through 2019 and beyond, while creating shareholder value.

In addition, CommScope is optimizing its excellent customer relationship and competitive position, paving the way for strong mobility solutions business, as communication service providers continue to build their networks to increase capacity and coverage.

For third-quarter 2019, the company expects revenues between $2.3 billion and $2.5 billion. It anticipates non-GAAP earnings per share of 37-47 cents, based on 232 million shares.

Zacks Rank & Stocks to Consider

CommScope currently has a Zacks Rank #5 (Strong Sell). A few better-ranked stocks in the broader industry are PCTEL, Inc. PCTI, Nokia Corp. NOK and Viasat, Inc. VSAT. While PCTEL sports a Zacks Rank #1 (Strong Buy), Nokia and Viasat carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PCTEL surpassed earnings estimates in each of the trailing four quarters, the average surprise being 110.4%.

Nokia surpassed earnings estimates thrice in the trailing four quarters, the average positive surprise being 89.3%.

Viasat surpassed earnings estimates in each of the trailing four quarters, the average surprise being 59.4%.

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