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Zayo's Video Network Solution Chosen by News Broadcaster

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Zayo Group Holdings, Inc. (ZAYO - Free Report) recently clinched a contract from an unnamed news broadcaster to offer a managed video network solution.

Zayo’s Media Networks, supported by its video network control center, enables the company to provide live video products. Notably, the company’s Media Networks solution has the capability to offer broadcasters, content providers and multichannel video programming distributors with high bandwidth and low latency access to television channels. The company delivers the 100G-enabled Media Network solutions on its owned fiber network, which extends across North America and Europe.

Notably, the company’s Media Networks portfolio comprises dedicated video solutions, managed video network and cloud-based production, among others. As a matter of fact, the use of its diverse fiber network solution will allow the leading news broadcaster to distribute data and video to its bureaus based in the United States and in Europe.

Zayo is well positioned to benefit from a diversified blue-chip customer base that comprises the largest and most sophisticated users of bandwidth. It aims to grow the network business at 5% and beyond while controlling expenses to boost OpEx efficiency. The company emphasizes on less than 12-month payback deals while leaning into strategic investments like e-rate deals, mobile infrastructure and long-haul fiber. Such deals leverage its existing assets in conjunction with new builds. These are likely to deliver strong free cash flow yields and attractive returns on invested capital.

Currently, the company remains bullish about the prospects of its largest business segment, Fiber Solutions, as it is witnessing a very strong deal momentum. Over the past three months, the Zacks Rank #3 (Hold) stock has returned 18.2%, outperforming the industry’s rise of 4.4%.

However, given the company’s extensive presence in international markets, its business is exposed to exchange rate fluctuations and foreign currency translation risks.

Key Picks

Some better-ranked stocks from the Zacks Computer and Technology sector are Ciena Corporation (CIEN - Free Report) , Bandwidth Inc. (BAND - Free Report) and Cisco Systems, Inc. (CSCO - Free Report) . While Ciena sports a Zacks Rank #1 (Strong Buy), Bandwidth and Cisco Systems carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ciena surpassed estimates in each of the trailing four quarters, the average positive earnings surprise being 18.83%.

Bandwidth outpaced estimates in each of the preceding four quarters, the average earnings surprise being 115.72%.

Cisco Systems exceeded estimates in each of the preceding four quarters, the average positive earnings surprise being 2.08%.

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