CenturyLink, Inc. (CTL) is likely to benefit from the acquisitions of Cognilytics and DataGardens in the future. We believe strength in products such as high-speed Internet, high bandwidth data services, Prism TV, and managed hosting services remain key growth drivers for the company.
Over the last three years, CenturyLink has been trying all means to establish itself as a global leader in cloud infrastructure and hosted IT solutions designed for enterprise customers. CenturyLink expects to build better infrastructure to meet the growing need for cloud hosting and colocation services. Further, the company’s strong network capabilities, integrated hosting and network solutions will likely promote growth in the cloud business.
In Dec 2014, the company acquired Cognilytics – a leading provider of advanced predictive analytics and Big Data solutions to mid-sized and large enterprises. Cognilytics’ decision sciences and advanced predictive analytics will be integrated into CenturyLink’s IT services, cloud-based, managed as well as Big Data services, which will enable business customers to effectively and quickly monetize their data assets. In the same month, the company took over DataGardens, a leading Canadian provider of software for cloud-based disaster recovery-as-a-service (DRaaS), ideally suited for small and mid-sized enterprises.
CenturyLink is investing in fiber-to-the-tower (FTTT) expansion and has already completed 1,200 fiber builds as of the third quarter of 2014.
On the downside, deteriorating legacy voice and access revenues owing to wireless substitution, cash flow pressure, federal regulations, labor issues and the constant need to upgrade technology are some of the major risks facing the company.
CenturyLink’s core local phone business has slowed significantly, which is evident from the consistent decline in access lines on an organic basis. This is primarily due to the rapid substitution of traditional wireline telephone services by wireless and other competitive offerings and lower long-distance minutes of use.
CenturyLink currently has a Zacks Rank #3 (Hold).
Key Picks in the Sector
Some better-ranked wireless stocks are Gogo Inc. (GOGO), Cogent Communications Holdings, Inc. (CCOI) and BlackBerry Limited (BBRY). All these stocks hold a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment