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CLFD is Steadily Expanding Fiber Portfolio: Will It Boost Prospect?
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Key Takeaways
CLFD's Clearfield Operating Segment saw 47% sales and 151% net income growth in Q2.
With fiber demand rising, CLFD ramps up innovation to streamline the fiber deployment process.
CLFD aligns portfolio with BABA rules to tap BEAD broadband buildout funding in the coming years.
Clearfield Inc. (CLFD - Free Report) is witnessing solid market traction in the Clearfield Operating Segment. The uptick is driven by growing demand for fiber optic management, protection, and delivery solutions in multiple end markets, including Large Regional Service Provider, MSO and Community Broadband. In the second quarter, the Clearfield Operating Segment reported staggering 47% year-over-year growth, while net income in this segment grew 151% year over year. Higher net sales, improved utilization of manufacturing overhead, and decreased provision for excess inventory reserves drove profit margin.
The accelerated pace of digital transformation is driving demand for fiber installation nationwide. In the next few years, the fiber industry is expected to grow at a substantial rate, backed by growing usage of advanced applications and the government’s effort to bridge the digital divide. Clearfield is broadening its portfolio offerings to capitalize on this emerging market trend. The company recently introduced the industry’s smallest 10-port access terminal called TetherSmart Multi-Fiber Terminal.
The solution, with its compact design, support for both centralized and distributed split architectures, and plug-and-play connectivity, simplifies the fiber deployment process. Service providers are looking for compact, faster, and smarter deployment options for use in Fiber-to-the-Home (FTTH), Fiber-to-the-Business (FTTB), and 5G backhaul network applications. Clearfield’s new micro-sized terminal matches these requirements and, by enabling quicker setup and activation of fiber networks, it accelerates time to revenue for service providers.
The Build America, Buy America (BABA) initiative with Broadband Equity, Access and Deployment (BEAD) program is expected to be a key growth driver for the company in the upcoming years. Management is taking necessary actions to align its production processes and portfolio offerings with BABA and capitalize on the opportunities the BEAD program will bring in the future.
How Are Competitors Faring?
Clearfield faces competition from Corning Incorporated (GLW - Free Report) and CommScope Holding Company Inc. (COMM - Free Report) in the fiber broadband space. Corning boasts a broader portfolio of fiber optic connectivity products compared to Clearfield. To achieve compliance with the Build America, Buy America Act, 55% of the content of a manufactured product needs to be produced in the United States. Corning’s fiber optic cable, cabinets, terminals, network interface devices and connected cable assemblies are compliant with BABA. This will give it a competitive edge in tapping into the BEAD funding project focused on expanding broadband access across the country.
CommScope, another industry-leading supplier of connectivity solutions worldwide, has been expanding its manufacturing capabilities in America to match the growing domestic demand. It has designed its FTTH portfolio with compliance with the BABA Act, making it easier for service providers who are opting to use the BEAD funding program to incorporate CommScope’s solution suite.
CLFD’s Price Performance, Valuation and Estimates
Shares of Clearfield have increased 0.5% in a year compared with the Wireless Equipment industry’s growth of 38.4%.
Image Source: Zacks Investment Research
Going by the price/book ratio, the company’s shares currently trade at 2.08 book value, lower than 5.12 for the industry but above the stock’s mean of 1.88. It carries a Value Score of D.
Image Source: Zacks Investment Research
CLFD is currently witnessing an uptrend in estimate revisions. Earnings estimates for 2025 have increased to 19 cents from a loss of 29 cents over the past 60 days, while the same for 2026 has remained unchanged at 67 cents over the same period.
Image: Shutterstock
CLFD is Steadily Expanding Fiber Portfolio: Will It Boost Prospect?
Key Takeaways
Clearfield Inc. (CLFD - Free Report) is witnessing solid market traction in the Clearfield Operating Segment. The uptick is driven by growing demand for fiber optic management, protection, and delivery solutions in multiple end markets, including Large Regional Service Provider, MSO and Community Broadband. In the second quarter, the Clearfield Operating Segment reported staggering 47% year-over-year growth, while net income in this segment grew 151% year over year. Higher net sales, improved utilization of manufacturing overhead, and decreased provision for excess inventory reserves drove profit margin.
The accelerated pace of digital transformation is driving demand for fiber installation nationwide. In the next few years, the fiber industry is expected to grow at a substantial rate, backed by growing usage of advanced applications and the government’s effort to bridge the digital divide. Clearfield is broadening its portfolio offerings to capitalize on this emerging market trend. The company recently introduced the industry’s smallest 10-port access terminal called TetherSmart Multi-Fiber Terminal.
The solution, with its compact design, support for both centralized and distributed split architectures, and plug-and-play connectivity, simplifies the fiber deployment process. Service providers are looking for compact, faster, and smarter deployment options for use in Fiber-to-the-Home (FTTH), Fiber-to-the-Business (FTTB), and 5G backhaul network applications. Clearfield’s new micro-sized terminal matches these requirements and, by enabling quicker setup and activation of fiber networks, it accelerates time to revenue for service providers.
The Build America, Buy America (BABA) initiative with Broadband Equity, Access and Deployment (BEAD) program is expected to be a key growth driver for the company in the upcoming years. Management is taking necessary actions to align its production processes and portfolio offerings with BABA and capitalize on the opportunities the BEAD program will bring in the future.
How Are Competitors Faring?
Clearfield faces competition from Corning Incorporated (GLW - Free Report) and CommScope Holding Company Inc. (COMM - Free Report) in the fiber broadband space. Corning boasts a broader portfolio of fiber optic connectivity products compared to Clearfield. To achieve compliance with the Build America, Buy America Act, 55% of the content of a manufactured product needs to be produced in the United States. Corning’s fiber optic cable, cabinets, terminals, network interface devices and connected cable assemblies are compliant with BABA. This will give it a competitive edge in tapping into the BEAD funding project focused on expanding broadband access across the country.
CommScope, another industry-leading supplier of connectivity solutions worldwide, has been expanding its manufacturing capabilities in America to match the growing domestic demand. It has designed its FTTH portfolio with compliance with the BABA Act, making it easier for service providers who are opting to use the BEAD funding program to incorporate CommScope’s solution suite.
CLFD’s Price Performance, Valuation and Estimates
Shares of Clearfield have increased 0.5% in a year compared with the Wireless Equipment industry’s growth of 38.4%.
Image Source: Zacks Investment Research
Going by the price/book ratio, the company’s shares currently trade at 2.08 book value, lower than 5.12 for the industry but above the stock’s mean of 1.88. It carries a Value Score of D.
Image Source: Zacks Investment Research
CLFD is currently witnessing an uptrend in estimate revisions. Earnings estimates for 2025 have increased to 19 cents from a loss of 29 cents over the past 60 days, while the same for 2026 has remained unchanged at 67 cents over the same period.
Image Source: Zacks Investment Research
CLFD stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.