Wednesday, May 27, 2020

Comtech Telecommunications Corp. (CMTL)

Continues to Solidify NG-911 Offerings with New Acquisition

Comtech Telecommunications Corp. engages in the design, development, production, and marketing of products, systems, and services for advanced communications solutions in the United States and internationally. It operates in three segments: Telecommunications Transmission, Mobile Data Communications, and RF Microwave Amplifiers. The Telecommunications Transmission segment provides satellite earth station equipment and systems, over-the-horizon microwave systems, and forward error correction technology, which are used in various commercial and government applications, including backhaul of wireless and cellular traffic, broadcasting (including HDTV), IP-based communications traffic, long distance telephony, and secure defense applications. The Mobile Data Communications segment provides mobile satellite transceivers, and computers and satellite earth station network gateways and associated installation, training, and maintenance services; supplies and operates satellite packet data networks, including arranging and providing satellite capacity; and offers microsatellites and related components. The RF Microwave Amplifiers segment designs, develops, manufactures, and markets satellite earth station traveling wave tube amplifiers (TWTA) and broadband amplifiers. Its amplifiers are used in broadcast and broadband satellite communication; defense applications, such as telecommunications systems and electronic warfare systems; and commercial applications comprising oncology treatment systems, as well as to amplify signals carrying voice, video, or data for air-to-satellite-to-ground communications. The company serves satellite systems integrators, wireless and other communication service providers, broadcasters, defense contractors, military, governments, and oil companies. Comtech markets its products through independent representatives and value-added resellers. The company was founded in 1967 and is headquartered in Melville, New York.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

New Acquisition. Yesterday, Comtech announced it had acquired NG-911, Inc., a pioneer of next generation 911 solutions for public safety agencies in the Midwest. Terms of the deal were not made public and the financial impact of the acquisition is not material. In connection with the deal, Comtech was awarded several contracts to deploy the Company's Solacom's Guardian Call Handling solutions to the 9-1-1 Northern Illinois Next Generation Alliance Consortium valued at more than $15 million over a multi-year period.

Solidifying NG-911 Position. The acquisition of NG-911 continues to expand and solidify Comtech's next generation 911 position, in our view. In February, Comtech was selected to provide a Guardian Next Generation 9-1-1 call handling solution to the Northwest Central Dispatch System, an intergovernmental consolidated emergency dispatch system providing 9-1-1 services for several communities in northwest suburban Chicago and received a $ 6.6 million award to upgrade a statewide NG 9-1-1 system for a New England state. Last year, the Company acquired Solacom, received a $100 million NG-911 award from Massachusetts, and...

This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report.  NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision.