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Comtech Telecommunications, Inc. CMTL recently announced that it has secured a major defense contract from L3Harris for supplying Anti-Jam Modem (A3M) technologies for the U.S. Army and Air Force. Comtech has a solid track record of developing and installing highly customizable, interoperable and robust communication systems for the Department of Defense. Comtech SATCOM’s modems comply with several stringent standards of the U.S. Government as well as various commercial standards. Based on these factors, L3Harris, a prominent defense contractor, awarded the $26 million contract for modem technologies to CMTL.
A3M technologies is a leading-edge communication system engineered to ensure the optimum functionality of satellite communication infrastructure. Anti-Jam modems are software defined, making them highly adaptable and versatile for a wide range of scenarios. The solution effectively thwarts jamming attempts, making them suitable for defense operations in hostile environments. This implies the modems can maintain secure and consistent communication channels, eliminating the risk of disruptions. Seamless communication is a vital element for the military, ensuring improved coordination and situational awareness.
Moreover, Comtech’s A3M uses advanced protected tactical waveforms, significantly increasing the resiliency of communication channels. It also supports anti-jamming capabilities over the Wideband Global Satellites, which are designated to facilitate high-capacity communications for the U.S. Government and its partners.
Will This Development Drive Comtech’s Share Performance?
The recently inked contract serves as a testament to Comtech’s growing prowess as a leading provider of advanced A3M technology. Moreover, the contract vehicle will allow the U.S. Dept. of Defense to increase order requests for SATCOM modems in the future. This presents a solid growth opportunity for Comtech.
However, intensifying competition in the wireless equipment market and various operational challenges are affecting CMTL’s profitability.
CMTL Stock’s Price Movement
Shares of Comtech have lost 51.8% over the past year against the industry’s growth of 40.6%.
Image Source: Zacks Investment Research
CMTL’s Zacks Rank and Key Picks
Comtech currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader industry have been discussed below.
InterDigital IDCC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the trailing four quarters, it delivered an earnings surprise of 158.41%. It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops a wide range of advanced technology solutions used in digital cellular, wireless 3G, 4G and IEEE 802-related products and networks.
Celestica Inc. CLS carries a Zacks Rank #2 (Buy) at present. The company provides competitive manufacturing technology and service solutions for printed circuit assembly and system assembly, as well as post-manufacturing support to many of the world's leading original equipment manufacturers.
United States Cellular Corporation USM sports a Zacks Rank of 1 at present. In the last reported quarter, it delivered an earnings surprise of 150%.
U.S. Cellular has taken concrete steps to accelerate subscriber additions and improve churn management. The company aims to offer the best wireless experience to customers by providing superior quality network and national coverage. It is well-positioned to support the investment required for network enhancements, including the deployment of 5G technology.