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CommScope (COMM) Moves 6% Higher: Will This Strength Last?
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CommScope (COMM - Free Report) shares rallied 6% in the last trading session to close at $16.35. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 1% gain over the past four weeks.
COMM’s rally is driven by its decision to spin-off its Home Networks business to create an independent publicly traded entity. The company will have three segments — Broadband Networks, Venue and Campus Networks and Outdoor Wireless Networks — post the separation. The tax-free transaction is part of CommScope NEXT, a long-term growth strategy, which focuses on eliminating redundant costs to bolster business optimization. Markedly, the restructuring will enable both the entities to focus more on go-to-market strategy and develop technologies for home and consumer products on the back of a resilient manufacturing model. The spin-off, which is subjected to certain regulatory conditions, is expected to close by the end of the first quarter of 2022.
Price and Consensus
This wireless and broadband network technology company is expected to post quarterly earnings of $0.31 per share in its upcoming report, which represents a year-over-year change of +158.3%. Revenues are expected to be $2.01 billion, down 1.1% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For CommScope, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on COMM going forward to see if this recent jump can turn into more strength down the road.
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CommScope (COMM) Moves 6% Higher: Will This Strength Last?
CommScope (COMM - Free Report) shares rallied 6% in the last trading session to close at $16.35. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 1% gain over the past four weeks.
COMM’s rally is driven by its decision to spin-off its Home Networks business to create an independent publicly traded entity. The company will have three segments — Broadband Networks, Venue and Campus Networks and Outdoor Wireless Networks — post the separation. The tax-free transaction is part of CommScope NEXT, a long-term growth strategy, which focuses on eliminating redundant costs to bolster business optimization. Markedly, the restructuring will enable both the entities to focus more on go-to-market strategy and develop technologies for home and consumer products on the back of a resilient manufacturing model. The spin-off, which is subjected to certain regulatory conditions, is expected to close by the end of the first quarter of 2022.
Price and Consensus
This wireless and broadband network technology company is expected to post quarterly earnings of $0.31 per share in its upcoming report, which represents a year-over-year change of +158.3%. Revenues are expected to be $2.01 billion, down 1.1% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For CommScope, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on COMM going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>