Commscope Holding Company, Inc.

COMM

Radio & Tv Broadcasting & Communications Equipment

Mkt Cap

$335.1M

PE

-0.18

Debt

$9.371B

Cash

$357.2M

EV

$9.349B

FCF

$113.4M

Market Cap

$335.1M

P/E Ratio

-0.18

Debt

$9.371B

Cash

$357.2M

EV

$9.349B

FCF

$113.4M

Charts data: {"Earnings":[{"time":"2014-12-30","value":236772000},{"time":"2015-12-30","value":-70875000},{"time":"2016-12-30","value":222838000},{"time":"2017-12-30","value":193764000},{"time":"2018-12-30","value":140200000},{"time":"2019-12-30","value":-973200000},{"time":"2020-12-30","value":-629500000},{"time":"2021-12-30","value":-519900000},{"time":"2022-12-30","value":-1345900000},{"time":"2023-12-30","value":-1512700000}],"Sales":[{"time":"2014-12-30","value":3829614000},{"time":"2015-12-30","value":3807828000},{"time":"2016-12-30","value":4923621000},{"time":"2017-12-30","value":4560582000},{"time":"2018-12-30","value":4568507000},{"time":"2019-12-30","value":8345100000},{"time":"2020-12-30","value":8435900000},{"time":"2021-12-30","value":8586700000},{"time":"2022-12-30","value":9228100000},{"time":"2023-12-30","value":5789200000}],"Net Margins":[{"time":"2014-12-30","value":0.06182659662305392},{"time":"2015-12-30","value":-0.018612973064959865},{"time":"2016-12-30","value":0.04525896692698321},{"time":"2017-12-30","value":0.04248668262077077},{"time":"2018-12-30","value":0.030688362740825394},{"time":"2019-12-30","value":-0.11661933350109645},{"time":"2020-12-30","value":-0.07462155786578788},{"time":"2021-12-30","value":-0.060547125205259296},{"time":"2022-12-30","value":-0.14584800771556442},{"time":"2023-12-30","value":-0.2612968976715263}],"Assets":[{"time":"2014-12-30","value":4955885000},{"time":"2015-12-30","value":7502631000},{"time":"2016-12-30","value":7141986000},{"time":"2017-12-30","value":7041666000},{"time":"2018-12-30","value":6630540000},{"time":"2019-12-30","value":14431600000},{"time":"2020-12-30","value":13576800000},{"time":"2021-12-30","value":13259500000},{"time":"2022-12-30","value":11685400000},{"time":"2023-12-30","value":9371900000}],"Stockholders Equity":[{"time":"2014-12-30","value":1307619000},{"time":"2015-12-30","value":1222720000},{"time":"2016-12-30","value":1394084000},{"time":"2017-12-30","value":1647826000},{"time":"2018-12-30","value":1756768000},{"time":"2019-12-30","value":836300000},{"time":"2020-12-30","value":355000000},{"time":"2021-12-30","value":-156600000},{"time":"2022-12-30","value":-1546000000},{"time":"2023-12-30","value":-2968800000}],"ROE":[{"time":"2014-12-30","value":0.18107109180885259},{"time":"2015-12-30","value":-0.05796502878827532},{"time":"2016-12-30","value":0.15984546124910695},{"time":"2017-12-30","value":0.11758765792019303},{"time":"2018-12-30","value":0.07980564309003807},{"time":"2019-12-30","value":-1.1636972378333135},{"time":"2020-12-30","value":-1.7732394366197184},{"time":"2021-12-30","value":3.3199233716475094},{"time":"2022-12-30","value":0.8705692108667529},{"time":"2023-12-30","value":0.5095324710320668}],"ROA":[{"time":"2014-12-30","value":0.11651783687474589},{"time":"2015-12-30","value":0.024203909268628566},{"time":"2016-12-30","value":0.08047481470840184},{"time":"2017-12-30","value":0.06782627861077194},{"time":"2018-12-30","value":0.06786294932237796},{"time":"2019-12-30","value":-0.03523517835860196},{"time":"2020-12-30","value":-0.0038153320370043014},{"time":"2021-12-30","value":0.003665296579810702},{"time":"2022-12-30","value":-0.06108477245109282},{"time":"2023-12-30","value":-0.012046650092297186}]}

CommScope Holding Company, Inc. provides infrastructure solutions for communications, data center, and entertainment networks worldwide. It operates through five segments: Connectivity and Cable Solutions (CCS); Outdoor Wireless Networks (OWN); Networking, Intelligent Cellular and Security Solutions (NICS); Access Network Solutions (ANS); and Home Networks (Home). The CCS segment provides network solutions for indoor and outdoor network applications; and fiber optic and copper connectivity and cable solutions for use in telecommunications, cable television, residential broadband networks, data centers and business enterprises. The OWN segment provides base station antennas, radio frequency filters, tower connectivity, microwave antennas, metro cell products, cabinets, steel towers, accessories, wireless Spectrum management business and Comsearch products. The NICS segment offers indoor and outdoor Wi-Fi and long-term evolution (LTE) access points, access and aggregation switches; an Internet of Things suite, on-premises and cloud-based control and management systems; and software and software-as-a-service applications. The ANS segment offers cable modem termination systems, video infrastructure, distribution and transmission equipment and cloud solutions that enable facility-based service providers to construct a state-of-the-art residential and metro distribution network. The Home segment subscriber-based solutions that support broadband and video applications. The company offers its products and services through independent distributors, specialized resellers and distributors, wireless and wireline operators, original equipment manufacturers, satellite video distributors, and system integrators, as well as directly to customers. The company was formerly known as Cedar I Holding Company, Inc. and changed its name to CommScope Holding Company, Inc. in January 2011. CommScope Holding Company, Inc. was founded in 1976 and is headquartered in Hickory, North Carolina.

Sector

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6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Commscope Holding Company, Inc.

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$113.4M	$100.2M	$88.58M	$78.28M	$69.18M	$61.14M	$54.04M	$47.76M	$42.21M	$37.3M	$32.97M	$329.7M
DCF		$87.15M	$66.98M	$51.47M	$39.56M	$30.4M	$23.36M	$17.95M	$13.8M	$10.6M	$8.149M	$81.49M
Value	$430.9M

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 8.2%

Earnings Stability -80%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been decreasing indicating a lower marginal ROA with respect to the calculated one, this could impede growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	-1.9%	4.5%	4.2%	3.1%	-12%	-7.5%	-6.1%	-15%	-26%	-38%
ROA	2.4%	8%	6.8%	6.8%	-3.5%	-0.38%	0.37%	-6.1%	-1.2%	-3%
ROE	-5.8%	16%	12%	8%	-120%	-180%	330%	87%	51%	56%

What is the average Net Margin?

The average Net Margin over the past 5 years is -10.47%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is -4.38%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is -0.68%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is -1.34%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +30.71%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +38.13%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	21.82	8.15	8.57	9.80	20.36	30.77	-1061.54	108.55	39.64	82.64
Debt Equity	4.38	3.34	2.69	2.30	11.99	27.30	-61.69	-6.23	-3.16	-2.81
MIN
Graham Stability	-	-	100%	100%	-520%	-	-	-	-	-520%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 82.64.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -19.39.

What is the Graham’s Stability?

Graham’s Stability measure stands at -5.24.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	2.3%	4.9%	-12%	-37%	-3.2%
Net Income	-	-	-	-	-15%
Stockholders Equity	-	-	-	-	-13%
FCF	-12%	-10%	-9.1%	170%	11%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +4.85%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is -3.22%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -14.6%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is -.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -13.32%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is -10.49%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +10.63%.