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Zayo (ZAYO) Chosen by Tech Firm for Dark Fiber Solution

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Zayo Group Holdings, Inc. recently announced that it has been chosen by a global technology company for dark fiber solution to connect key markets across the country. This represents one of the bigger long-haul dark fiber contracts of 2018. The communications infrastructure solutions provider did not disclose its customer’s name.

Zayo will deploy the high-count fiber solution within a specified period of time, customized to the customer’s requirements. Notably, the solution will boost thousands of miles of Zayo’s wide-ranging dark fiber networks across multiple regions in the United States, including Columbus, Ohio to Ashburn, Virginia and Dallas, Texas to Atlanta, Georgia routes.

The company’s dark fiber provided it significant competitive edge over its rivals in winning this deal. This is because dark fiber is the perfect solution to enable customers manage their own network that would scale to accommodate growth.

Zayo is experiencing broad-based demand across all the customer verticals. Its extensive network footprint, comprehensive product portfolio and ability to penetrate in different markets are laudable. It remains enthusiastic about the prospects of its largest business segment — Fiber Solutions — as it is witnessing a very strong momentum.

Furthermore, Zayo is on a constant lookout for strategic acquisitions to improve its operating leverage, extend network reach and broaden customer base. In fact, the company announced its plan to separate into two publicly traded companies to focus better on its businesses. One of the entities will focus on providing core communications infrastructure while the other will leverage infrastructure to provide solutions for a broad set of enterprise customers. The company expects the process to be complete in late 2019.

The company’s shares have lost 28.5% on an average compared with the industry’s decline of 35.2% in the past year.



Zayo currently has a Zacks Rank #4 (Sell). Better-ranked stocks in the broader industry include Comtech Telecommunications Corp. (CMTL - Free Report) , Ericsson (ERIC - Free Report) and PCTEL, Inc. , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.         

Comtech has a long-term earnings growth expectation of 5%.

Ericsson currently has a forward P/E (F1) of 20.7x.

PCTEL currently has a forward P/E (F1) of 59.1x.

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