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Comtech Ensures Steady Revenue Stream With Contract Renewal

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Comtech Telecommunications Corp. (CMTL - Free Report) recently announced that its Enterprise Technologies group, which is part of the Commercial Solutions segment, renewed a contract worth $2.3 million with an unnamed global telecommunications firm. Per the deal, Comtech will continue providing maintenance and support services for various location-based services. The contract reinforces the existing business relationship between the two companies and ensures a steady revenue stream for Comtech.

The Enterprise Technologies group offers networking solutions that provide precise device location, mapping and messaging solutions. These include the proprietary Trusted Location product, Location Studio platform and Indoor Location solution. The Trusted Location is a software-based scoring system that allows providers to accurately determine mobile location and identify fraudulent behavior and other security risks. The Location Studio platform allows customers to build their own applications with end-customer functionality such as maps, search, geocoding, routing and navigation using their brand. On the other hand, the Indoor Location solution enables a cell phone user’s geospatial position when traditional GPS, global navigation satellite systems and cellular technologies do not work well. The products are sold to mobile network operators, government agencies and leading enterprises across the globe.

Comtech has created a niche market for highly secure wireless solutions to defend global security and improve public safety. The company continues providing market-leading products for messaging, location and deployable wireless communications. It offers services to integrate networks, servers, gateways and intelligent peripherals, and provides transmission responses to users.

Customers depend on Comtech’s commercial wireless applications, which are based on innovative mobile cloud computing services like text messaging, public safety solutions, hyper-local search, workforce tracking, social applications, and telematics and navigation. Federal government agencies also depend on Comtech’s cyber security expertise, professional consulting services and highly secure deployable satellite solutions for mission-critical communications.

With a significant exposure to large growing end markets, characterized by emerging technology trends for secure wireless communications, Comtech’s earnings estimates for fiscal 2019 have increased a solid 70.2% in the past year to 97 cents.

The company has recorded an average return of 9.5% in the past year, while the industry has witnessed a 4.2% fall.


 

Comtech currently has a Zacks Rank #2 (Buy). Other players in the industry worth mentioning include PCTEL, Inc. (PCTI - Free Report) , QUALCOMM Incorporated (QCOM - Free Report) and Ubiquiti Networks, Inc. (UBNT - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PCTEL is currently trading at a forward P/E (F1) of 55.6x.

Qualcomm has long-term earnings growth expectation of 10.9%. It surpassed earnings estimates in each of the trailing four quarters, the average positive surprise being 18.5%.

Ubiquiti has long-term earnings growth expectation of 14%. It surpassed earnings estimates thrice in the trailing four quarters, the average positive surprise being 11.3%.

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