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Telecom businesses are benefiting from increased demand for broadband, telecom managed services, and technological improvements. Further advances in technology are expected to further expand the telecommunications business. Investors can therefore consider adding Verizon Communications (VZ), IDT Corporation (IDT), Ooma (OOMA), and Spock Holdings (SPOK) to their watchlists in 2023.
Despite macroeconomic obstacles, the telecommunications industry has been able to sustain development by capitalizing on high consumer demand. With ongoing innovation and adoption of next-generation technologies, investors may consider adding quality telecoms stocks. Verizon Communications Inc. (VZ), IDT Corporation (IDT), Ohma Co., Ltd. (Oma), and Spok Holdings, Inc. (Spock) to your watchlist in 2023.
The telecommunications business has undergone a transformation, from the landline era to the advent of smartphones. Due to digital transformation and the continuation of hybrid lifestyles, the industry is growing as businesses ramp up their services to provide high-speed network connectivity.
In addition, the wireless communication service industry is expanding rapidly due to the expansion of cellular networks and wearable terminals, and the spread of information and communication technology. The wireless communication services market is projected to grow rapidly. 7.4% CAGR by 2030.
So fundamentally healthy telecom stocks VZ, IDT, OOMA, and SPOK could see a surge in the coming months.
Verizon Communications K.K.VZ)
VZ and its subsidiaries provide communications, technology, information and entertainment products and services to consumers, businesses and governments around the world. Its segments are Consumer and Business.
On February 12, 2023, VZ announced that its latest data plan, the 50 Mbps Verizon Fios service, will be available in Boston, helping Boston-area small business owners get high-speed Internet access. Did. This should strengthen the company’s revenue stream.
In terms of future EV/EBITDA, VZ is currently trading at 7.13x, 15.7% lower than the industry average of 8.46x. A reservation price of 1.58x is 20.6% lower than the industry average of 1.99x.
VZ trailing 12 months gross margin of 56.79% is 14.4% higher than the industry average of 49.63%. Last 12 months net profit margin was 15.53%, 355% higher than the industry average of 3.41%.
VZ’s operating revenues for the fourth quarter ended December 31, 2022 were $35.25 billion, an increase of 3.5% year-over-year. Additionally, wireless device revenue rose 4.1% year-on-year to his $7.63 billion. Net income increased 41.4% year-over-year to $6.7 billion. VZ’s EPS was $1.56, up 40.5% from the year-ago quarter.
VZ’s revenue is expected to grow slightly year-on-year to $137.76 billion in 2023. EPS is expected to increase slightly annually over the next five years. VZ’s stock fell slightly to close the last trading session at $38.30.
VZ’s strong fundamentals are POWR ratingA stock’s overall B rating indicates a ‘buy’ on our proprietary rating system. POWR Ratings evaluate stocks by 118 different factors, each with its own weighting.
VZ has a B grade for value, stability and quality.in the Telecom – Domestic It ranks 4th out of 20 stocks in the industry. click here Additional POWR Ratings for VZ Growth, Momentum and Sentiment can be found here.
IDT Corporation (IDT)
IDT provides telecommunications and payment services in the United States and internationally. The company operates in his three segments. net2phone; and traditional communications.
On February 23, 2023, IDT announced Zendit, a cloud-based prepaid services platform. Zendit offers a unique prepaid solution that meets the demands of businesses and organizations of all sizes while ensuring uptime and availability. This should be an important addition to the company’s portfolio.
In terms of 12-month EV/EBITDA, IDT is currently trading at 8.83x, 8.6% below the industry average of 9.66x. 0.59x price/sales in the last 12 months is 54.8% lower than the industry average of 1.32x.
IDT’s 12-month ROCE was 23.99%, 542.7% higher than the industry average of 3.73%. Last 12 months ROTA is 8.26%, 366.4% above the industry average of 1.77%.
IDT’s operating income for the first quarter ended October 31, 2022 was $20.2 million, an increase of 46.9% year-over-year. Additionally, net income was $11 million, compared to a net loss of $2.48 million in the year-ago quarter.
In addition, EPS was $0.43 on a loss per share of $0.10 in the year-ago quarter. Also, his adjusted EBITDA was $24.3 million, up 32.1% year-over-year.
The stock has gained 19.6% over the past six months and closed its last trading session at $30.33.
IDT’s strong outlook is reflected in its POWR rating. The stock has an overall rating of B, which converts to a buy in our proprietary rating system. There is an A grade for growth and a B grade for value and stability. 3rd in the industry. Click for additional POWR ratings on IDT’s Sentiment, Momentum, and Quality. here.
Oma Co., Ltd. (Oma)
OOMA provides telecommunications services and related technologies to businesses and consumers in the United States and Canada. The company’s products and services include Ooma Office, Ooma Office Pro, Ooma Connect, Ooma Enterprise, Ooma AirDial, Ooma Premier, and Ooma Telo Air.
In terms of future EV/sales, OOMA is currently trading at 1.45x, 25.5% below the industry average of 1.95x.
OOMA’s gross profit margin for the last 12 months was 63.05%, 27% higher than the industry average of 49.63%. Asset turnover over the last 12 months was 1.81%, 286.7% higher than the industry average of 0.47%.
OOMA’s total revenue for the third quarter ended October 30, 2022 was $56.78 million, up 15.3% year-on-year. Subscriptions and services revenue increased 15.9% year-over-year to $51.75 million. Additionally, gross profit was $35.92 million, representing an increase of 18.8% year-over-year.
Consensus revenue estimates for fiscal 2023 are $216.09 million, representing a 12.4% year-over-year increase. His EPS for the company is expected to be his $0.53 in 2023, up 3.9% year-over-year. Over the past six months, the stock has gained 12.2% and closed its last trading session at $13.07.
OOMA’s POWR Rating reflects this promising outlook. The stock has an overall A rating that equates to a strong buy in our proprietary rating system. There are B’s for Value, Stability, Growth, and Sentiment. Second in the industry.
In addition to the above, we also evaluated the momentum and quality of OOMA.Get All OOMA Ratings here.
Spock Holdings Co., Ltd. (Spock)
SPOK provides healthcare communication solutions worldwide. Provide clinical information to care teams to improve patient outcomes. The company offers subscriptions to one-way or two-way messaging and ancillary services and sells devices to resellers.
In terms of forward EV/sales, SPOK is currently trading at 1.42x, 27.4% below the industry average of 1.95x. 7.74x 12-month EV/EBITDA is 8.5% lower than the industry average of 8.46x.
SPOK’s gross margin for the last 12 months was 67.52%, 36% higher than the industry average of 49.63%. Asset turnover over the last 12 months was 0.55%, 16.9% above his industry average of 0.47%.
For the fourth quarter ended December 31, 2022, SPOK had operating income of $2.96 million, compared with a loss of $20.81 million in the same period last year. Net income was $24.23 million and net loss was $16.67 million for the same period. Also, EPS was $1.21 and his loss per share was $0.86 the year before.
Analysts expect SPOK’s revenue to rise slightly to $132.43 billion in 2024. Last trading session at $10.30.
It’s no surprise that SPOK has an overall A rating that equates to a strong buy on our POWR rating system.
There are A grades for growth, sentiment, and quality, and B grades for value. The stock price ranks first in the industry. We also assessed the stability and momentum of SPOK.Get all SPOK ratings here.
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VZ shares were unchanged in Thursday’s pre-market trading. Year-to-date, VZ is down -1.47%, while the benchmark S&P 500 index is up 2.80% over the same period.
About the Author: RashmiKumari
Rashmi’s passion for capital markets, wealth management, and financial regulatory issues led her to pursue a career as an investment analyst. With her Master of Commerce degree, she aims to help individual investors understand complex financial issues and make sound investment decisions.
post 4 telecom stocks to buy or add to your watchlist in 2023 first appeared StockNews.com