Top 15 Communication Equipment Stocks
Marvin ranks 15 communication equipment companies by Overall score. Cisco Systems, Ubiquiti and Motorola Solutions lead the list. Scores compare each company with others in its own industry.
Communication equipment companies make the hardware that moves data and voice, such as networking gear, wireless and radio systems, and optical components. This list shows 15 of them, ordered by Marvin's Overall score, with Cisco Systems first.
The companies differ a lot. Some combine strong margins with steady growth, while others are growing fast but are not yet profitable. Each pick below notes both the strengths and the weak or missing figures.
Keep in mind that Marvin's scores only show how a company compares with others in its industry today. They are a starting point for research, not a forecast or a recommendation.
The list
How Marvin ranked these stocks
Marvin included companies above about $300 million in size and ranked them by Marvin scores from 0 to 100. The scores are relative to each company's own industry, here Communication Equipment, with the highest Overall score first. A high score means a company looks strong compared with its industry peers, not compared with every stock in the market.
Companies above about $300 million in size, ranked by Marvin scores (0-100, relative to each company's own industry). The Communication Equipment industry, highest Overall score first.
The stocks, one by one
Cisco Systems, Inc. CSCO
Cisco has the top Overall score, 95, with an operating margin of 24.3% and a free cash flow margin of 20.2%, which suggest strong profitability. Debt-to-equity of 0.49 is modest. Caution: revenue growth of 11.8% is steady rather than fast.
Ubiquiti Inc. UI
Ubiquiti pairs revenue growth of 27.2% with a high operating margin of 36.2% and a return on equity of 66.7%, a sign of strong profitability. Caution: no debt-to-equity figure is available, so its borrowing level cannot be judged from this data.
Motorola Solutions, Inc. MSI
Motorola Solutions shows an operating margin of 24.9% and a free cash flow margin of 21.9%, with a return on equity of 79.9%. Caution: debt-to-equity of 3.60 is notable, and growth of 8.0% is modest.
Lumentum Holdings Inc. LITE
Lumentum has fast revenue growth of 83.2% and a high opportunity score of 96, though its quality score is lower at 63. Caution: return on equity is negative at -149.3%, and the free cash flow margin is a thin 10.0%.
Viavi Solutions Inc. VIAV
Viavi grew revenue by 40.0% and keeps a gross margin of 57.7%. Caution: its operating margin of 6.9% is thin, return on equity is slightly negative at -2.1%, and no debt-to-equity figure is available.
Zebra Technologies Corporation ZBRA
Zebra Technologies has a quality score of 80, an operating margin of 14.7% and a free cash flow margin of 15.5%, which suggest solid profitability. Caution: revenue growth of 8.3% is modest compared with faster-growing peers.
Belden Inc. BDC
Belden grew revenue by 10.3% and earns a return on equity of 17.6%, with an operating margin of 11.9%. Caution: its gross margin of 37.6% and free cash flow margin of 7.4% are lower than many peers on this list.
Calix, Inc. CALX
Calix has a quality score of 86 and revenue growth of 20.3%. Caution: its operating margin of 5.5% is thin, the opportunity score is a lower 47, and no debt-to-equity figure is available.
Applied Optoelectronics, Inc. AAOI
Applied Optoelectronics grew revenue by 82.8% and carries little debt, with debt-to-equity of 0.08. Caution: the operating margin is negative at -11.3%, the quality score is 48, and no free cash flow margin is available.
Ciena Corporation CIEN
Ciena grew revenue by 18.8% and has a free cash flow margin of 13.5% and a return on equity of 21.4%. Caution: its operating margin of 12.3% is middling, and debt-to-equity of 1.07 is higher than several peers.
Digi International Inc. DGII
Digi International has a gross margin of 63.8%, a free cash flow margin of 26.9% and low debt, with debt-to-equity of 0.17. Caution: revenue growth of 1.5% is nearly flat, and the opportunity score is just 33.
Clearfield, Inc. CLFD
Clearfield has revenue growth of 19.6% and a quality score of 71, with a free cash flow margin of 4.8%. Caution: the operating margin is slightly negative at -0.2%, and no debt-to-equity figure is available.
Extreme Networks, Inc. EXTR
Extreme Networks has a gross margin of 61.5% and a return on equity of 47.5%. Caution: its operating margin of 4.9% is thin, and debt-to-equity of 2.21 is on the higher side, which can inflate return on equity.
Arlo Technologies, Inc. ARLO
Arlo Technologies has very little debt, with debt-to-equity of 0.05, and a quality score of 69. Caution: its operating margin is only 2.7%, the opportunity score is low at 13, and no free cash flow margin is available.
Ondas Holdings Inc. ONDS
Ondas Holdings shows very rapid revenue growth of 605.3% and a gross margin of 43.7%. Caution: it is far from profitable, with an operating margin of -140.4% and a free cash flow margin of -98.7%. Return on equity and debt figures are unavailable.
Common questions
What does a communication equipment company do?
These companies design and sell hardware and related software that carry voice and data, such as network switches, wireless gear, radios and optical components. Customers include telecom carriers, businesses and governments.
What does the Overall score mean?
Overall is a Marvin score from 0 to 100 that compares a company with others in its own industry today. Here that means other communication equipment companies. It is not a prediction or a recommendation.
Why do some companies have a high Overall score but weak figures?
Marvin scores blend several measures, so a company can score well on quality or opportunity while one figure, such as operating margin or return on equity, is weak or missing. Each pick above notes the main caution, so check the individual figures too.
Keep reading
- Top 15 Technology Stocks by Marvin Opportunity Score
- Top 15 Technology Companies With the Strongest Businesses
- Top 15 Technology Stocks Right Now, Ranked by Marvin Scores
- Top 25 Quality Stocks Trading Well Below Their Highs
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Marvin's scores (0-100) compare each company with others in its industry today. Growth and margin figures come from SEC filings. This is general information, not personal investment advice or a recommendation to buy or sell anything. Do your own research.