On Jun 28, Zacks Investment Research downgraded leading communications company, Level 3 Communications, Inc. by a notch to a Zacks Rank #4 (Sell).
The company's top line faces the risk of the impact of adverse foreign currency movements. Moreover, intense competition in the enterprise communications market and the company’s high customer concentration are material headwinds.
Rising Competition
As stated earlier, enterprise communications is a highly competitive market. In North America, Level 3 Communications shares space with telecom behemoths like Verizon Communications Inc. (VZ - Free Report) and A&T Inc. (T - Free Report) . Comcast Corp. (CMCSA - Free Report) is the latest entrant in the market. In Europe and Latin America, the company competes with companies like Telefonica, Orange, BT Group and Telmex among others. Most of these companies boast a better resources portfolio compared to Level 3 Communications, which enables them to bring technically superior products to market.
High Customer Concentration
Customer concentration is another major concern for Level 3 Communications. The company's top 10 customers account for the majority of its top line. Thus, the loss of any of these customers or consolidation among them will have a significant impact on its revenues. Also, fluctuations in the global macro economy could have an adverse effect on the company’s business, results of operations and financial condition.
On the Bright Side
Level 3 Communications has a strong presence in several aspects of the enterprise networking market, including data networks, content distribution, managed services, securities, voice cloud and cloud connection. The company stands to benefit from the ongoing trend of large enterprise customers shifting to IP and fiber-based network architecture. Also, as per research carried out by Vertical Systems Group, Level 3 Communications has been consistently gaining share in the global Ethernet market.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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On Jun 28, Zacks Investment Research downgraded leading communications company, Level 3 Communications, Inc. by a notch to a Zacks Rank #4 (Sell).
The company's top line faces the risk of the impact of adverse foreign currency movements. Moreover, intense competition in the enterprise communications market and the company’s high customer concentration are material headwinds.
Rising Competition
As stated earlier, enterprise communications is a highly competitive market. In North America, Level 3 Communications shares space with telecom behemoths like Verizon Communications Inc. (VZ - Free Report) and A&T Inc. (T - Free Report) . Comcast Corp. (CMCSA - Free Report) is the latest entrant in the market. In Europe and Latin America, the company competes with companies like Telefonica, Orange, BT Group and Telmex among others. Most of these companies boast a better resources portfolio compared to Level 3 Communications, which enables them to bring technically superior products to market.
High Customer Concentration
Customer concentration is another major concern for Level 3 Communications. The company's top 10 customers account for the majority of its top line. Thus, the loss of any of these customers or consolidation among them will have a significant impact on its revenues. Also, fluctuations in the global macro economy could have an adverse effect on the company’s business, results of operations and financial condition.
On the Bright Side
Level 3 Communications has a strong presence in several aspects of the enterprise networking market, including data networks, content distribution, managed services, securities, voice cloud and cloud connection. The company stands to benefit from the ongoing trend of large enterprise customers shifting to IP and fiber-based network architecture. Also, as per research carried out by Vertical Systems Group, Level 3 Communications has been consistently gaining share in the global Ethernet market.
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 >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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