Most investors chase the apps and the AI layer. This is the less glamorous part: the physical gear that keeps broadband, wireless, and enterprise networks running.
A pending divestiture could slash leverage and refocus the story as spending cycles start to thaw.
The Defense Plan (Sponsored)
Markets don’t wait for calm—especially when political chaos takes center stage.
With Trump and Musk locked in a growing public feud, the fear of market volatility is very real.
While the headlines escalate, institutions are quietly stockpiling gold to shield against the blowback.
This free Gold IRA Survival Guide outlines a fully legal way to reposition your savings now—without taxes or penalties.
Get ahead of the next wave before the damage becomes irreversible.
[Get the Gold Protection Guide Free]
The Setup
CommScope (NASDAQ: COMM) is a communications equipment and network infrastructure provider with a market cap around $4B. The stock is up sharply over the past year after a brutal multi-year drawdown, which tells you two things at once:
The market is willing to believe in a turnaround
The stock can still whip around on sentiment, telecom capex headlines, and balance-sheet updates
At current prices, COMM is no longer left for dead, but it is still priced like a company the market does not fully trust. That is exactly where mispricings can live, especially when a real catalyst changes the financial profile.
What The Company Actually Does
CommScope sells the picks-and-shovels of connectivity. The portfolio spans:
Fiber broadband and access networks: equipment that helps service providers push faster speeds to homes and businesses
Wireless networks: infrastructure supporting mobile buildouts and upgrades
Data centers and enterprise connectivity: cabling and structured connectivity behind cloud and on-prem networks
Campus and venue networking: hardware that keeps offices, stadiums, and public spaces online
This is not a new product cycle story in the consumer sense.
It is a capital spending cycle story. When carriers and enterprises spend, vendors like this get pulled forward.
When budgets freeze, revenue can fall fast and leverage becomes the headline.
2026 Setups (Sponsored)
Most investors have never been shown this before.
Just before the Great Depression, a little-known market signal quietly began identifying historic winners—long before headlines caught on.
That same signal flagged several legendary stocks at prices that now seem impossible.
Now, with volatility rising again, it’s flashing green on three under-the-radar opportunities positioned to outperform into 2026.
Click here NOW — before it's too late.
Why The Stock Is Moving Now
The cleanest driver in your notes is the pending $10.5B sale of the Connectivity and Cable Solutions unit to Amphenol, expected to close in January 2026.
That matters because it changes what investors argue about:
Before: Can the debt load hold up through a slow capex environment
After: What does the streamlined business look like with lower leverage and more flexibility
This type of transaction can reset the narrative. It does not automatically make the remaining business great, but it can remove the existential discount that hangs over leveraged turnarounds.
Want to make sure you never miss a stock recommendation?
Elite Trade Club now offers text alerts — so you get trending stocks and market-moving news sent straight to your phone before the bell. Email’s great. Texts are faster.
The Bull Case
1) Deleveraging creates optionality
A major asset sale can reduce net debt meaningfully and improve liquidity. That can lower interest expense, reduce refinancing risk, and give management room to invest selectively instead of playing defense every quarter.
2) Operating leverage is real if demand turns even slightly
Network infrastructure tends to have meaningful fixed costs. When volumes stabilize and grow, margins can expand quickly. That is why modest growth can matter a lot more than the headline suggests.
3) The spending cycle does not need to boom
The base case bulls are underwriting is not telecom capex goes vertical. It is more like:
selective carrier upgrades resume
fiber continues to build out
data center expansion stays resilient
enterprises keep modernizing campus connectivity
If you get less bad plus a better balance sheet, the stock can keep working.
4) Improving estimate revisions can pull in quant flows
You flagged upward earnings revisions recently.
Regardless of how you feel about analyst forecasting, estimate momentum often attracts incremental demand from quant and factor strategies.
That can reinforce price strength even before fundamentals fully show up in reported results.
Signals Activating Now (Sponsored)
Every market cycle produces a select group of companies that drastically outperform the rest.
The latest screening has pinpointed the 5 Stocks Set to Double, each showing rare traits linked to early stage momentum.
These names carry the same type of indicators that have historically appeared ahead of strong rallies.
Earlier reports featured stocks that delivered +175%, +498%, and +673%.
Get the Free 5 Stocks Set to Double Report.
The Bear Case
1) This is still a cyclical demand story
Even after the divestiture, the remaining company is tethered to capex budgets. If carriers stay tight, enterprise refresh cycles slip, or data center builds pause, revenue can disappoint.
2) Turnaround stocks rarely move in a straight line
The stock’s past year performance is a reminder: COMM can rally hard, then give back gains fast on a single update. If you cover it, you want to frame expectations around volatility, not smooth compounding.
3) Execution risk after the sale
Big divestitures can create transition issues: operational disentanglement, customer uncertainty, and a market that wants clean guidance on what the new CommScope looks like. If management communication is messy, the multiple can compress even if the balance sheet improves.
4) Competition is credible
This is a crowded ecosystem with strong incumbents across subsegments. COMM does not need to win the category, but it does need to prove it can defend share and protect margins as spending returns.
What To Watch In 2026
If you want a simple scorecard that keeps you honest, watch these four things:
Deal close and proceeds usage
How much debt comes down, what remains, and whether the market believes leverage is now reasonable.Guidance reset
The first full outlook after the transaction will matter more than any single quarter. Investors will be looking for a clearer earnings power range.Carrier and enterprise spending tone
Not the macro headlines, but what management says about order patterns, backlog, and customer conversations.Margin trajectory
If revenue stabilizes and margins do not improve, the operating leverage thesis weakens. If margins climb with modest growth, the model starts to look cleaner.
Valuation And Positioning
Screens paint COMM as inexpensive versus the broader tech hardware universe, and the reason is simple: the market is still pricing in risk.
A low-looking multiple does not automatically mean cheap. It often means uncertain.
But if the sale reduces the balance sheet overhang and the company delivers even a couple quarters of steady execution, the valuation can start to look less like a warning label and more like a setup.
This is the core bet: a re-rated multiple plus operating leverage. You do not need heroic growth for that to work. You need the fear premium to fade.
My Take
COMM is a classic plumbing trade with a real catalyst.
The product portfolio sits in the right place with fiber, wireless upgrades, enterprise connectivity, and data centers are not going away.
The stock’s sharp rebound tells you the market is already sniffing a reset.
The key is not to pretend this is a safe compounder. It still trades like a leveraged, cycle-exposed turnaround.
If the asset sale closes cleanly, debt comes down materially, and management can show stable demand with improving margins, COMM could keep grinding higher in 2026.
If spending slips again or the post-sale story gets muddy, this name can retrace fast.
A clean framing is simple: the catalyst is balance-sheet relief, and the payoff is operating leverage if the capex cycle cooperates.
That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.
Best Regards,
— Adam Garcia
Elite Trade Club
Click here to get our daily newsletter straight to your cell for free.
P.S. Just like this newsletter, it's 100% free*, and you can stop at any time by replying STOP.
