Social distancing implies a higher value to communications technology of every kind. It’s axiomatic. However, what analysts and investors are only recently beginning to appreciate is that the genie may never fit back into the bottle again on many of the themes that have come to dominate the pandemic market.
Work-from-home is likely here to stay on a wide basis because, for many of us, it works without a decline in productivity and saves businesses costs on leasing and other overhead factors. The same can be said about many other features of pandemic life. While we will clearly go back to much of the way life was before 2020 after a widely available and effective vaccine is in the game, many themes defining the market over recent months represent long-term shifts.
As a result, communications stocks offer investors a central avenue for exposure to a structural theme. With that in mind, we take a look at some of the more interesting names in the space, including: RingCentral Inc. (NYSE: RNG), SC Holdings Corp (OTC PINK: SCNG), and Zoom Video Communications Inc. (NASDAQ: ZM).
RingCentral Inc. (NYSE: RNG) provides software-as-a-service solutions that enable businesses to communicate, collaborate, and connect in North America. The company’s products include RingCentral Office that provides communication and collaboration across various modes, including high-definition voice, video, SMS, messaging and collaboration, conferencing, online meetings, and fax; RingCentral Professional, a cloud based virtual telephone service that provides inbound call answering and management services for professionals; and RingCentral Fax that provides online fax capabilities.
Its products also comprise RingCentral Contact Center, a collaborative contact center solution that delivers omni-channel; RingCentral Glip, a team messaging and collaboration solution that allows a range of teams to stay connected through various modes of communication through an integration with RingCentral Office; and RingCentral Meetings, a collaborative meetings solution that offers web meetings, video conferencing, and screen sharing. In addition, the company offers RingCentral Engage Digital, a digital customer engagement platform that allows enterprises to interact with their customers; RingCentral Engage Voice, a cloud-based outbound/blended customer engagement platform for midsize and enterprise companies; and RingCentral Live Reports, an add-on for RingCentral Office customers to gather real-time information.
RingCentral Inc. (NYSE: RNG) recently announced that its unified communications platform including team messaging, video meetings, and cloud phone system will now be available in Germany with a new datacenter in Frankfurt, and a new office in Hamburg, Germany.
According to the release, as RingCentral continues its global expansion efforts, Germany remains a key strategic location for the company. The new datacenter will also give users access to local phone numbers and emergency services in compliance with local laws and regulations. RingCentral will offer customers local data storage, the ability to register endpoints in-country, and keep voice and video call media local. The new datacenter will also give users access to local phone numbers and emergency services in compliance with local laws and regulation. All team messaging, voicemails, audio and video recordings, call logs, faxes and analytics data will also be stored locally.
The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 5% in that timeframe.
RingCentral Inc. (NYSE: RNG) managed to rope in revenues totaling $278M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 29.2%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($773.8M against $371.1M).
SC Holdings Corp (OTC PINK: SCNG), also known as Strattners, is a publicly traded small-cap conglomerate and parent company of the Strattner portfolio of brands and subsidiaries. The company manages multiple alternative asset classes, including private equity, convertibles, credit, and hedge funds. The action for the company now is mostly about Strattner Financial’s key subsidiary, Strattner Technologies LLC, which is quickly moving into an emerging leadership role in the satellite-based communications space.
Strattner Technologies LLC also recently signed a contract with satellite phone manufacturer AdvanceTC Limited (OTC:ATCLF) to service and commercialize up to one million phones via the Strattner.Space platform. AdvanceTCs android based satellite-smartphone Xplore 7 is a FCC/SIRIM certified rugged satellite-smartphone with 4G LTE, satellite messaging and emergency button device which received authorization by the United States Federal Communications Commission (FCC) in 2019.
SC Holdings Corp (OTC PINK: SCNG), which owns Strattner Financial Group, and its subsidiary, Strattner Technologies, just recently announced, along with Pareteum Corporation (Nasdaq:TEUM), a global cloud communications platform company, that the two have partnered to launch the Strattner Voice brand, a GSM cellular network complementing its satellite communications network Strattner.Space.
According to the release, Strattner Technologies will utilize Pareteum’s Experience Cloud platform to enter the mobile communications market with the mission to reconnect Americans with their friends, family and business associates both in the US and across the world, in these pandemic times. Strattner is bridging the gap between cellular and satellite networks on a single smartphone device. Strattner.Space, the Satellite communications division of the company, has strategically combined with Strattner Cellular division to bring this product solution to market.
David Blunk, CTO of Strattner Group stated, “We are very excited about the opportunity to go to market with a unified cellular solution that integrates rural market coverage on satellite technology.”
SC Holdings Corp (OTC PINK: SCNG) recently reported that assets under management in its wholly owned private funds TBS Equities Fund LLC and TBS Capital LP increased 192% from $2,328,582 to $6,812,000 attributable to a growing securities portfolio. The company continues to line up key deals to commercially expand in the sat-com space.
Zoom Video Communications Inc. (NASDAQ: ZM) bills itself as a company that provides a video-first communications platform that delivers changes how people interact primarily in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. It connects people through frictionless video, voice, chat, and content sharing.
The company’s cloud-native platform enables face-to-face video experiences and connects users across various devices and locations in a single meeting. It serves education, entertainment/media, enterprise infrastructure, finance, healthcare, manufacturing, non-profit/not for profit and social impact, retail/consumer products, and software/Internet industries, as well as individuals.
Zoom Video Communications Inc. (NASDAQ: ZM) and Lumen Technologies, Inc. (NYSE: LUMN) just recently announced that the companies will partner allowing Lumen to offer Zoom as part of its Unified Communications and Collaboration Suite. Lumen will deliver enhanced services around Zoom’s best-in-class video-first unified communications platform to their large and growing base of customers across the globe.
According to the release, Zoom and Lumen will partner to provide enhanced delivery, customer success, and managed services to companies using Zoom, to deliver an outstanding enterprise experience throughout the customer lifecycle. Additionally, the Lumen network will allow it to deliver an enhanced quality experience, as well as combining its embedded network security with Zoom’s built-in security features to proactively protect customers using the combined services.
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action ZM shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -6% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities.
Zoom Video Communications Inc. (NASDAQ: ZM) pulled in sales of $663.5M in its last reported quarterly financials, representing top line growth of 355%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($1.8B against $1.3B).