COMM Shares Rise 192.2% Year to Date: Should You Invest in the Stock?

CommScope Holdings Company, Inc. COMM has gained 192.2% year to date compared with the Communication Infrastructure industry’s growth of 95.3%. The stock has also outperformed the Zacks Computer & Technology sector and the S&P 500’s growth during this period.

It has also outperformed its competitors, such as Corning Incorporated GLW and Ubiquiti Inc UI. Corning has surged 80.2% while Ubiquiti has gained 106.1% year to date.

COMM Rides on Portfolio Strength, Broad Customer Base

CommScope’s comprehensive, differentiated portfolio allows it to hold a dominant position in the communication infrastructure industry. The company is witnessing solid customer growth across multiple segments. Strong cloud and datacenter growth is driving growth in the Connectivity and Cable Solutions segment. The Ruckus segment is benefiting from solid demand for Ruckus WiFi solutions. High demand for DOCSIS 4.0 products and higher license sales are driving revenue growth in the Access Networks Solution segment.

Enterprises like Charter Communications, Inc., Comcast Corporation, Cox Communications, Rogers Communications Inc., National Broadband Network Company Limited and more rely on COMM’s product suite to advance their network infrastructure. A worldwide salesforce and extensive network of channel partners, including independent distributors, system integrators and value-added resellers, enable CommScope to efficiently serve its broad customer base across 100 countries. 

CommScope recently announced the availability of its evolved SYSTIMAX Constellation worldwide. The edge-based power and connectivity platform effectively delivers greater power and fast speed to thousands of devices. The lower cost, space, labor and time requirements match the requirements for today’s hyperconnected enterprise. CommScope has recently joined forces with Nokia to accelerate fiber to the home deployment in the Asia Pacific region. Nokia is set to combine its  Broadband Easy digital automation platform with COMM’s FLX ODN non-hardened connectorized terminals during this venture.

Key Challenges for COMM

CommScope faces fierce competition in each of its served markets. In the CCS segment, it faces competition from industry giants like Amphenol Corporation and Corning Incorporated. In the RUCKUS segment, it faces competition from Ubiquiti.

The growing tension between the United States and China remains a major concern. The imposition of tariffs on communication equipment from China can impact COMM’s prospects.  Volatility in prices of raw materials and components is impacting the company’s profitability. Fluctuating spending patterns from cable operators and wireless carriers due to macroeconomic headwinds also strain margins.

Estimate Revision Trend of COMM

COMM is currently witnessing a downtrend in estimate revisions. Earnings estimates for 2025 have declined 0.77% to $1.29 over the past 60 days, while the same for 2026 has decreased 1.22% to $1.62.

Key Valuation Metric of COMM

From a valuation standpoint, COMM appears to be relatively cheaper compared to the industry but above its mean. Going by the price/sales ratio, the company shares currently trade at 0.57 forward sales, lower than 0.86 for the industry but above its mean of 0.25.

End Note

CommScope is benefiting from healthy traction in several segments. Strong demand in the data center vertical is a positive. A broad customer base, strong focus on innovation and strategic collaboration with other industry leaders are growth drivers.

However, stiff competition from major industry leaders weighs on the margin. The growing Sino-U.S. trade tension and tariff-related uncertainties are major concerns. With a Zacks Rank #3 (Hold), COMM appears to be treading in the middle of the road, and new investors could be better off if they trade with caution. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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