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3 Telecom Stocks Most Wall Street Analysts are Bullish About
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The year 2022 witnessed intense market volatility as high inflationary pressures, a challenging macroeconomic environment and fresh COVID-19 restrictions in China disrupted normal business operations and supply-chain mechanisms of various firms. However, telecom firms relentlessly provided the vital lifeline to countless humans with large-scale 5G deployments, as virtual communication replaced in-person exchanges with the work-from-home option coming into vogue. The firms worked in unison to effectively handle the upsurge in data traffic as digital sustainability became the norm of the day.
As the curtains roll down on an eventful 2022, the world eagerly awaits a new year that will likely tame inflation and mitigate recessionary fears. The unpredictable market conditions have highlighted the need for stocks with the potential for a healthy return. One of the safest options to capitalize on such unique money-minting opportunities is to adhere to Wall Street recommendations and follow the experts’ advice.
Before we try to replicate this model in the Telecom sector to identify three stocks with solid Zacks Rank and robust average broker rating, let us delve a little deep into the current market dynamics.
Telecom Sector Dynamics
The fifth generation of cellular technology, or 5G, has accentuated the need for high-speed, high-bandwidth and low-latency connections. 5G has fast-tracked the wide proliferation of video and other bandwidth-intensive applications with a data transmission rate of about 10-100 times faster than the existing 4G networks. Billed as the technology of the future with faster download speed and low latency, 5G is touted as the primary catalyst for next-generation IoT services. These include connected cars, augmented reality, virtual reality platforms, smart cities and connected devices that are likely to revolutionize key industry verticals.
As the 5G ecosystem evolves with a fast-track rollout across the globe, it is likely to offer a plethora of opportunities for diverse industries to spearhead innovation and redefine our daily lives. Riding on such growth drivers, various telecommunication firms are poised to benefit in 2023 and beyond. Below is a list of three such stocks in random order.
3 Telecom Stocks to Keep an Eye on
Clearfield, Inc. (CLFD - Free Report) : Headquartered in Minneapolis, MN, Clearfield is a leading provider of communication networks, telecom services and support solutions. With a market cap of $1.49 billion, this Zacks Rank #1 (Strong Buy) stock delivered an earnings surprise of 39.7%, on average, in the trailing four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is witnessing a strong demand environment, largely driven by an effort by rural broadband operators to establish themselves as dominant broadband access providers. In addition, Clearfield is gaining traction with Tier 2 carriers that aim to extend their fiber connectivity across the country. The stock has gained 30.9% over the past year. It has an average brokerage recommendation (ABR) of 1.33 on a scale of 1 to 5 (Strong Buy to Strong Sell). ABR is the calculated average of actual recommendations made by brokerage firms and portends the future potential of the stock. Earnings estimates for Clearfield for the current year have moved up 59.7% since April 2022.
Image Source: Zacks Investment Research
Harmonic Inc. (HLIT - Free Report) : Headquartered in San Jose, CA, Harmonic provides video delivery software, products, system solutions and services worldwide. With more than three decades of experience, it has revolutionized cable access networking via the industry's first virtualized cable access solution, enabling cable operators to more flexibly deploy gigabit Internet service to consumers' homes and mobile devices.
Harmonic, carrying a Zacks Rank #2 (Buy), delivered an earnings surprise of 55.5%, on average, in the trailing four quarters. With a market cap of $1.41 billion, the stock has gained 15.7% over the past year. It has an ABR of 1.67 on a scale of 1 to 5. Earnings estimates for Harmonic for the current year have moved up 44.4% since April 2022.
A10 Networks, Inc. (ATEN - Free Report) : Headquartered in San Jose, CA, A10 Networks offers secure application services for on-premises, multi-cloud, and edge-cloud environments at hyperscale. It is benefiting from strong demand for networking solutions among service providers as network security and reliability gain precedence for multi-cloud transformation and 5G readiness. An expanding partner base and portfolio strength are helping it to navigate a challenging macroeconomic environment and supply chain constraints.
A10 Networks, carrying a Zacks Rank #2, delivered an earnings surprise of 12.7%, on average, in the trailing four quarters. It has a VGM Score of B. With a market cap of $1.27 billion, the stock has gained 9.2% over the past year. It has an ABR of 2.00 on a scale of 1 to 5. Earnings estimates for A10 Networks for the current year have moved up 7.8% since December 2021.
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3 Telecom Stocks Most Wall Street Analysts are Bullish About
The year 2022 witnessed intense market volatility as high inflationary pressures, a challenging macroeconomic environment and fresh COVID-19 restrictions in China disrupted normal business operations and supply-chain mechanisms of various firms. However, telecom firms relentlessly provided the vital lifeline to countless humans with large-scale 5G deployments, as virtual communication replaced in-person exchanges with the work-from-home option coming into vogue. The firms worked in unison to effectively handle the upsurge in data traffic as digital sustainability became the norm of the day.
As the curtains roll down on an eventful 2022, the world eagerly awaits a new year that will likely tame inflation and mitigate recessionary fears. The unpredictable market conditions have highlighted the need for stocks with the potential for a healthy return. One of the safest options to capitalize on such unique money-minting opportunities is to adhere to Wall Street recommendations and follow the experts’ advice.
Before we try to replicate this model in the Telecom sector to identify three stocks with solid Zacks Rank and robust average broker rating, let us delve a little deep into the current market dynamics.
Telecom Sector Dynamics
The fifth generation of cellular technology, or 5G, has accentuated the need for high-speed, high-bandwidth and low-latency connections. 5G has fast-tracked the wide proliferation of video and other bandwidth-intensive applications with a data transmission rate of about 10-100 times faster than the existing 4G networks. Billed as the technology of the future with faster download speed and low latency, 5G is touted as the primary catalyst for next-generation IoT services. These include connected cars, augmented reality, virtual reality platforms, smart cities and connected devices that are likely to revolutionize key industry verticals.
As the 5G ecosystem evolves with a fast-track rollout across the globe, it is likely to offer a plethora of opportunities for diverse industries to spearhead innovation and redefine our daily lives. Riding on such growth drivers, various telecommunication firms are poised to benefit in 2023 and beyond. Below is a list of three such stocks in random order.
3 Telecom Stocks to Keep an Eye on
Clearfield, Inc. (CLFD - Free Report) : Headquartered in Minneapolis, MN, Clearfield is a leading provider of communication networks, telecom services and support solutions. With a market cap of $1.49 billion, this Zacks Rank #1 (Strong Buy) stock delivered an earnings surprise of 39.7%, on average, in the trailing four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is witnessing a strong demand environment, largely driven by an effort by rural broadband operators to establish themselves as dominant broadband access providers. In addition, Clearfield is gaining traction with Tier 2 carriers that aim to extend their fiber connectivity across the country. The stock has gained 30.9% over the past year. It has an average brokerage recommendation (ABR) of 1.33 on a scale of 1 to 5 (Strong Buy to Strong Sell). ABR is the calculated average of actual recommendations made by brokerage firms and portends the future potential of the stock. Earnings estimates for Clearfield for the current year have moved up 59.7% since April 2022.
Image Source: Zacks Investment Research
Harmonic Inc. (HLIT - Free Report) : Headquartered in San Jose, CA, Harmonic provides video delivery software, products, system solutions and services worldwide. With more than three decades of experience, it has revolutionized cable access networking via the industry's first virtualized cable access solution, enabling cable operators to more flexibly deploy gigabit Internet service to consumers' homes and mobile devices.
Harmonic, carrying a Zacks Rank #2 (Buy), delivered an earnings surprise of 55.5%, on average, in the trailing four quarters. With a market cap of $1.41 billion, the stock has gained 15.7% over the past year. It has an ABR of 1.67 on a scale of 1 to 5. Earnings estimates for Harmonic for the current year have moved up 44.4% since April 2022.
A10 Networks, Inc. (ATEN - Free Report) : Headquartered in San Jose, CA, A10 Networks offers secure application services for on-premises, multi-cloud, and edge-cloud environments at hyperscale. It is benefiting from strong demand for networking solutions among service providers as network security and reliability gain precedence for multi-cloud transformation and 5G readiness. An expanding partner base and portfolio strength are helping it to navigate a challenging macroeconomic environment and supply chain constraints.
A10 Networks, carrying a Zacks Rank #2, delivered an earnings surprise of 12.7%, on average, in the trailing four quarters. It has a VGM Score of B. With a market cap of $1.27 billion, the stock has gained 9.2% over the past year. It has an ABR of 2.00 on a scale of 1 to 5. Earnings estimates for A10 Networks for the current year have moved up 7.8% since December 2021.