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Rapid technological development, need for faster connectivity, rapid adoption of 5G, and government investment in strengthening telecommunications infrastructure are driving the growth of the industry. Under these circumstances, it may be wise for investors to buy fundamentally strong telecommunications stocks Verizon Communications (VZ) and Uma (OOMA). These stocks are rated “Buy” on our proprietary rating system. keep reading.
We live in an increasingly connected world, and telecom companies are helping us deliver faster connections. As the number of mobile subscribers grows, the demand for high-speed data connections is skyrocketing.
The demand for faster connections is driving investment in 5G infrastructure, which in turn drives growth in the telecommunications sector. To take advantage of telecom tailwinds, investors can consider buying telecom stock Verizon Communications, which has strong fundamentals.VZ) and Oma Co., Ltd. (Oma)These stocks are rated ‘Buy’ on our proprietary rating system.
Before we dive deeper into the fundamentals of these stocks, let’s discuss why the telecommunications industry is well-positioned for growth.
In today’s digital world, we cannot live without connectivity. Telcos are helping speed up connectivity through 5G and other services. High-speed network connectivity is essential to enable a company’s digital transformation. The long-term outlook for the industry looks bright as demand for high-speed connectivity increases.
The size of the global telecommunications service market is Expand at CAGR 6.2% iShares US Telecommunications ETF (IYZ) 5% return over the last 6 months.
Let’s talk more about stocks.
Verizon Communications K.K.VZ)
VZ provides communications, technology, information and entertainment products and services to consumers, businesses and governments around the world. It operates in his two segments, Consumer and Business.
For forward-looking non-GAAP P/E, 7.97x VZ is 48.4% lower than the industry average of 15.44x. Its 11.02x forward EV/EBIT is 30.4% lower than the industry average of 15.83x.Similarly, its 1.14x forward price/sales 7.3% lower than the industry average of 1.23x.
For the fourth quarter of the fiscal year ended December 31, 2022, VZ’s total operating revenues increased 3.5% year-over-year to $35.25 billion. The company’s net income increased 41.4% year-on-year to $6.7 billion. Also, his EPS after adjustment came to his $1.19.
Analysts expect VZ’s revenue to increase slightly year-over-year to $33.69 billion for the quarter ending March 31, 2023. Fiscal 2024 EPS is expected to grow 1.4% year over year to $4.75. The company has outperformed consensus his EPS forecast in three of the last four quarters, marking a remarkable earnings history.
Over the past six months, the stock has gained 5.6% and closed its last trading session at $37.32.
VZ’s POWR rating It reflects this forward-looking outlook. The overall rating is B, which is equivalent to a purchase in our own rating system. POWR ratings evaluate stocks on 118 different factors, each with its own weighting.
Within Telecom – Domestic It ranks 3rd out of 19 stocks in the industry. Stock is B grade for stability. click here To review VZ’s additional POWR ratings for Growth, Value, Momentum, Sentiment, and Quality.
Oma Co., Ltd. (Oma)
OOMA provides telecommunications services and related technologies to businesses and consumers in the United States and Canada. The various products and services offered by the company include Ooma Office, Ooma Connect, Ooma Managed Wi-Fi, Ooma Enterprise and Ooma AirDial.
In terms of future EV/revenue, OOMA’s 1.26x is 31% lower than the industry average of 1.82x.
OOMA’s non-GAAP operating income increased 25.4% year-over-year to $4.02 million for the fourth quarter ended January 31, 2023. Non-GAAP net income increased 26.8% from the prior year period to $4.1 million.
Additionally, Adjusted EBITDA increased 26.5% year-over-year to $5.05 million and non-GAAP EPS was $0.16, up 23.1% year-over-year.
OOMA’s EPS and revenue are expected to increase 13.3% and 12.3% year-over-year to $140,000 and $56.5 million for the quarter ending April 30, 2023. It has a commendable and surprising earnings performance, beating consensus EPS forecasts in each of the last four quarters. Over the past nine months, the stock has gained 6.2% and closed its last trading session at $12.31.
OOMA’s POWR rating reflects a solid outlook. The stock has an overall A rating, corresponding to a strong buy.
No. 1 in the industry. Additionally, there are A grades for growth and sentiment, and B grades for value and stability. To see other OOMA ratings for Momentum and Quality, click here.
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VZ shares were unchanged in pre-market trading on Monday. Year-to-date, VZ is down -2.20%, while the benchmark S&P 500 index is up 8.20% over the same period.
About the Author: Malaika Alphonsus
Malaika’s passion for writing and interest in financial markets prompted her to pursue a career in investment research. With degrees in Economics and Psychology, she intends to help investors make informed investment decisions.
post Two telecom stocks rated ‘buy’ by Wall Street first appeared StockNews.com
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