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Will COMM Stock Gain From AFL Collaboration and Rising FTTH Demand?

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CommScope, Inc. (COMM - Free Report) announced that it has inked a licensing agreement with AFL, a leader in fiber optic solutions to manufacture CommScope’s fiber-to-the-home hardened connectivity solutions. This partnership represents a significant step to support the ‘Buy America, Build America’ initiatives and ensure eligibility for funding under the Broadband Equity Access Deployment program.

Along with bringing Prodigy solutions to its customers, AFL’s facilities will also help in meeting the growing global demand for FTTH installations. The initial product release, which is set to begin in 2025, will include drop assemblies and multiports powered by Prodigy. The global second sourcing with AFL will make the solution more readily accessible for several regions.

COMM’s Prodigy line of connectivity solutions brings multiple key benefits for FTTH implementations. Leveraging the converter technology, the Prodigy connectors offer seamless compatibility with legacy fiber infrastructure, minimizing installation errors and streamlining the integration process. Its interoperability and high-density features optimize warehousing and inventory management, thus lowering lead times. This supply chain efficiency is particularly crucial for remote areas where logistical issues are more prevalent. Its compact design, reusable core connectors and plastic-free packaging also reduce carbon footprint and ensure environmental sustainability.

Will This Venture Drive COMM’s Share Performance?

There is increasing demand for FTTH infrastructure worldwide, backed by business expansions and government-subsidized projects. Growing reliance on various digital services, e-learning, remote work, telemedicine and more has heightened the requirements for high-speed fiber networks among rural underserved communities. High interoperability, speed, simplicity, cost efficiency and sustainability features of Prodigy solutions make them well suited for deployments in remote and rural areas with limited resources and logistical hurdles.

Through this licensing agreement, CommScope gained a trusted manufacturing partner to scale the production process, expedite FTTH deployments and establish future ready fiber networks. This strategic move bodes well for COMM’s long term growth prospects.

COMM’s Stock Price Movement

Shares of CommScope have gained 63.8% over the past year compared with the industry’s growth of 5.7%.

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Image Source: Zacks Investment Research

COMM’s Zacks Rank and Key Picks

CommScope currently carries a Zacks Rank #3 (Hold). 

Arista Networks, Inc. (ANET - Free Report) carries a Zacks Rank #2 (Buy) at present. In the last reported quarter, it delivered an earnings surprise of 8.25%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It is engaged in providing cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for next-generation data center networks.

Ubiquiti Inc. (UI - Free Report) carries a Zacks Rank #2 at present. The company offers a comprehensive portfolio of networking products and solutions for service providers and enterprises.

Its excellent global business model, which is flexible and adaptable to evolving changes in markets, helps it to beat challenges and maximize growth. The company’s effective management of its strong global network of more than 100 distributors and master resellers improved its visibility for future demand and inventory management techniques.

Zillow Group, Inc. (ZG - Free Report) , carries a Zacks Rank #2 at present. In the last reported quarter, it delivered an earnings surprise of 25.81%.

It delivered an earnings surprise of 37.41%, on average, in the trailing four quarters. The company is witnessing solid momentum in rental revenues, driven by growth in both multi and single-family listings, which is a positive factor.

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