CLFD vs. COMM: Which Fiber Infrastructure Stock is a Better Buy Now?

Clearfield, Inc. CLFD and CommScope Holding Company Inc. COMM are major players in the fiber broadband space. Clearfield is an industry leader in fiber management and deployment solutions. CommScope is a premier provider of infrastructure solutions, including wireless and fiber optic solutions, for the core, access and edge layers of communication networks.

The fiber broadband industry in the United States is experiencing rapid expansion, backed by growing usage of high bandwidth-intensive applications across industries, and growing government initiatives to bridge the digital divide in rural and remote areas. Per a report of Grand View Research, the U.S. broadband market size is expected to grow at a 7.5% compound annual growth rate in the 2023-2030 period.

The Case for Clearfield

Clearfield is benefiting from solid demand in its Clearfield operating segment. Its connected home offerings, such as home deployment kits, which incorporate all necessary equipment for a fiber-to-the-home installation, are witnessing strong momentum. The kit is gaining popularity among service providers because it significantly speeds up the deployment process by reducing the number of truck rolls and boosting technician efficiency. The company is also benefiting from a sharp uptick in regional service provider verticals, backed by an improvement in demand and reduced inventory levels. Regional service providers’ move toward aggressive network build-up can boost Clearfield’s prospects in the upcoming quarters.

As the company continues to realign its portfolio in compliance with the Build America Buy America Act, the BEAD funding program is expected to be a key revenue catalyst in 2026. Moreover, the Enhanced Alternative Connect America Cost Model program is also expected to contribute to revenues in the near term. The company has purposely established its manufacturing in the United States and Mexico. This dual sourcing is enabling it to achieve tariff exemption covered under the United States, Mexico, and Canada agreement. Strong focus on cost optimization and improving supply chain resiliency is a positive.

Clearfield’s FieldSmart FiberFlex 600 active cabinet is also receiving strong industry recognition. Management’s emphasis on continuous innovation and the launch of cutting-edge products, such as the Flexible TetherSmart Multi-Fiber Terminal to streamline the fiber deployment process, will likely boost commercial prospects. Clearfield’s current ratio stands at 6.76, way above the industry's average of 1.26. A current ratio above 1 suggests that a company is well-positioned to meet its short-term obligations. Its cash ratio is 3.67.

However, macroeconomic instability, including an evolving tariff environment, is a concern. Despite management’s efforts to implement proactive tariff management, rising tariffs can raise the cost of some components sourced from Asia and also impact demand in some regions. Regulatory delays and administrative uncertainty in the BEAD program are a headwind. Clearfield is exposed to customer concentration risk. Any changes in the demand patterns of a large customer can significantly impact revenues. Moreover, the company operates in a highly competitive market, which includes industry leaders like Nokia, CommScope and Corning Cabling Systems, Inc., a division of Corning Incorporated GLW.

The Case for CommScope

CommScope’s Connectivity and Cable Solutions is witnessing solid improvement backed by healthy traction in its Enterprise Business. The company’s strength lies in its strong focus on innovation. The newly launched CommScope XPND fiber termination panel platform is perfectly aligned with key requirements for the fiber broadband sector, such as flexibility, scalability and cost efficiency. The open-source design of the solution allows service provider to configure the fiber network as per their evolving requirements with ease. 

The solution's empty panels allow service providers to use cassettes and modules tailored for their requirements. CommScope’s pay-as-you-go model, combined with a compact form factor, offers service providers a cost-effective path to upgrade their network services. This is a game-changer for fiber broadband deployment.

The company’s comprehensive, differentiated portfolio allows it to hold a dominant position in the communication infrastructure industry. The company has around 11,000 patents and patent applications. A worldwide salesforce and an 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. The company’s current ratio is 2.19, while its cash ratio is 0.47.

However, it faces stiff competition in each of its served markets. Clearfield, Amphenol and Corning are major competitors in its connectivity business. Corning’s comprehensive product offerings, comprising optical fiber, hardware, cables and connectors, enable it to create optical solutions to match varied customer requirements. The company also faces competition from several small and medium-sized companies at a regional level.

CommScope is also facing challenges due to constrained spending from cable operators and wireless carriers, owing to a challenging macroeconomic environment and high inflationary pressures. The growing tension between the United States and China relating to trade restrictions imposed on the sale of communication equipment to Chinese firms has dented the industry’s credibility and will likely lead to a loss of business.

How Do Zacks Estimates Compare for CLFD & COMM?

The Zacks Consensus Estimate for Clearfield’s 2025 sales and EPS implies year-over-year growth of 10.16% and 122.35%, respectively. The EPS estimate for 2025 has been trending northward over the past 60 days, while the 2026 EPS estimate has remained unchanged over the past 60 days.

The Zacks Consensus Estimate for CommScope’s 2025 sales indicates growth of 3.46% year over year, while EPS is projected to be 90 cents compared to a loss of 3 cents a year ago. The EPS estimate for both 2025 and 2026 has been trending northward over the past 60 days.

Price Performance & Valuation of CLFD & COMM

Over the past six months, Clearfield has gained 32%, while COMM has gained 7.7% over the same period.

CommScope looks more attractive than Clearfield from a valuation standpoint. Going by the price/sales ratio, COMM’s shares currently trade at 0.25 forward sales, lower than 2.72 for Clearfield.

End Note

While Clearfield sports a Zacks Rank #1 (Strong Buy), CommScope has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Both companies are steadily expanding their respective portfolios to gain a firmer footing in the growing fiber broadband market. Solid EPS and sales growth projection with upward estimate revision imply strong investors’ confidence in both stocks. CommScope’s end-to-end fiber and wireless infrastructure solution, with a vast customer base, offers a greater degree of resilience against macro uncertainty. However, the high debt burden remains a concern for CommScope.
 
Clearfield’s growing prowess in fiber management and deployment that offers easy-to-deploy solutions in rural and underserved regions, with a lower upfront cost, is gaining solid market traction. Clearfield’s stronger liquidity and focus on a niche market are allowing it to quickly expand its offerings as per evolving customer requirements, boosting brand loyalty and competitive edge. Hence, with a Zacks Rank #1, Clearfield seems to be a better investment option at the moment.

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