Will COMM's Portfolio Optimization Strategy Drive Long-Term Growth?

CommScope Holding Company, Inc. COMM has completed the divestiture of its Connectivity and Cable Solutions (CCS) segment. Amphenol Corporation has acquired the CCS segment for $10.5 billion. Following the divestiture, the company has undertaken a rebranding initiative to realign its corporate identity with its streamlined portfolio offerings.

The company will be renamed as Vistance Networks, and its Access Network Solutions business is rebranded as Aurora Networks. The company’s management is focused on improving transparency in the processes, reducing manufacturing costs, optimizing the overhead cost structure and improving working capital for enhanced profitability and cash flow. Earlier, the company divested its Home Networks business, Outdoor Wireless Networks segment and the Distributed Antenna Systems business units. The recent CCS segment sale is part of the broader approach of portfolio optimization.

The financial impact of these initiatives is far-reaching. The transaction will allow the company to pay off all of its outstanding debt. It has announced that it will distribute the excess cash to shareholders within 60 to 90 days post completion of the divestiture. The dividend is expected to be a minimum of $10 per share.

The divestiture will allow the company to focus on its major growth engines. The Ruckus Network segment will focus on developing leading WiFi, switching and cloud-managed platforms. The Aurora Networks will drive advancement in hybrid fiber coaxial and broadband network products. Such developments augur well for long-term sustainable growth.

Other Tech Firms Restructuring Portfolio

AT&T, Inc. T completed the divestiture of its remaining 70% stake in DIRECTV in 2025. It was a non-core asset for the company, and the divestiture was a prudent decision. The company has received $19 billion through prior TPG distributions and will also receive an additional $7.6 billion by 2029. The cash infusion is set to lower the debt burden and improve liquidity. AT&T is placing strong emphasis on strengthening its 5G portfolio and also aggressively pushing for fiber network expansion nationwide. The gain from divestiture will likely help in accelerating such initiatives.

Array Digital Infrastructure, Inc. AD, previously known as United States Cellular Corporation, rebranded its corporate identity following the divestiture of its wireless business to T-Mobile, US. Inc. (TMUS). The divestiture has enabled Array to improve its liquidity and reduce its debt burden, with an option to opportunistically monetize the retained 70% of total spectrum assets. Moreover, the company will enjoy a steady revenue stream with T-Mobile as its anchor tenant on a minimum of 2,015 incremental towers for 15 years, in addition to approximately 600 towers where it already serves as a tenant.

COMM’s Price Performance, Valuation and Estimates

CommScope shares have gained 270.8% over the past year compared with the industry’s growth of 140.3%.

From a valuation standpoint, CommScope trades at a forward price-to-sales ratio of 0.7, below the industry average.

Earnings estimates for 2025 have increased over the past 60 days, while the same for 2026 have declined.

CommScope currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research