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, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Strategic Investment. In the first step in the ultimate refinancing of its credit facility, Comtech announced a new $45 million investment from existing investors White Hat Capital Partners and Magnetar Capital. The new investment provides Comtech with financial flexibility in its refinancing as well as supports its strategic initiatives in satellite ground station infrastructure and next generation terrestrial wireless and wireless solutions.
Details. White Hat and Magnetar purchased $45.0 million of a new series of convertible preferred stock and exchanged all outstanding shares of Comtech’s existing convertible preferred stock for shares of the new series of convertible preferred stock. The preferred stock will be convertible into shares of Comtech common stock at a conversion price of $7.99 per share; carries a 9.00% dividend, payable in kind, or a 7.75% dividend, payable in cash, at Comtech’s election; and contains an optional redemption date of October 31, 2028. We expect additional details to be included in an 8-k filing in the next couple of days.
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*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.
In one of the largest tech industry mergers of recent years, Synopsys has announced it will acquire engineering simulation software maker Ansys in an all-cash deal valued at approximately $35 billion. The deal combines two leading players in software tools for semiconductor and electronic product design, expanding Synopsys’ total addressable market as it aims to create an integrated platform for chip design and beyond.
The merger agreement will see Synopsys pay around $390 per share for Ansys – $197 per share in cash plus about one-third of a Synopsys share for each Ansys share. This represents a premium of roughly 20% over Ansys’ recent share price. Ansys shareholders will own 16.5% of the combined company once the acquisition is finalized, expected in the first half of 2025 pending regulatory approvals.
Synopsys plans to fund the cash component of the deal through a combination of $16 billion in new debt financing and $3 billion cash on hand. The company had $1.4 billion in cash reserves as of October 2022. Synopsys CEO Sassine Ghazi has acknowledged the deal will not be accretive to earnings for at least 12 months post-closing due to financing and integration costs.
Expanding Synopsys’ Platform from Silicon to System
For Synopsys, a leading vendor of electronic design automation (EDA) software used by semiconductor companies, the deal strategically expands its platform. Ansys provides physics-based simulation software that helps engineers virtually test product design, performance and safety across industries like automotive, aerospace, consumer electronics and medical devices.
Synopsys aims to combine its strengths in chip design with Ansys’ expertise in simulating mechanical, thermal and electromagnetic effects at the full system level. This can help Synopsys address the entire electronic system lifecycle – from silicon to software to system integration.
The merger can also unlock new integrated workflows between the companies’ complementary technologies. For instance, connecting Ansys’ simulation tools to Synopsys’ ARC processor IP and DSO.ai AI-driven debugging solution. Such integration can speed up testing and validation for customers building advanced chips, electronics and embedded software.
Leveraging Ansys’ Footprint Across Industries
Another driver for Synopsys is leveraging Ansys’ customer footprint across major industries developing smart, connected products. As a leader in physics simulation, Ansys serves over 11,000 organizations globally. Its customer base includes manufacturers in automotive, aerospace, 5G telecom and medical technology.
The merger can open cross-selling opportunities for Synopsys to provide its EDA tools – from IP libraries to verification software – to Ansys’ customers working on chip-centric system designs. It also gives Synopsys greater exposure to growing demand for simulations, modelling and digital twins driven by trends like metaverse platforms, autonomous vehicles and the Internet of Things.
According to Synopsys, the combined company will have a total addressable market exceeding $50 billion by 2025 – significantly broadening its market beyond EDA software. In addition, Ansys’ recurring revenue base can provide Synopsys more stability to weather downturns in the historically cyclical semiconductor market.
Executing a Complex Tech Industry Merger
Despite the strategic benefits, executing a merger of this scale will be complex. Ansys has over 3,700 employees worldwide. Integrating its engineering teams and R&D roadmap with Synopsys’ will take time and care. Synopsys also has work ahead to achieve the full vision of a integrated “silicon-to-software” platform based on the combined portfolios.
Most importantly, the companies need to preserve Ansys’ neutrality and multi-vendor interoperability as it moves under Synopsys’ ownership. Any perception that Ansys will favor Synopsys’ own tools following the merger could drive customers to exploring alternatives. Maintaining Ansys as an “open platform” will be key.
Nonetheless, the deal provides Synopsys – already on a strong growth trajectory – a significant opportunity to expand its enterprise software footprint. If successful, it could cement Synopsys as the premier player in next-generation chip design workflows and empower even smarter, connected, electronics-driven experiences. But realizing Ansys’ full value will require skillful integration by Synopsys at a scale it has never attempted before.
British telecommunications giant Vodafone has announced a 10-year, $1.5 billion strategic partnership with Microsoft to bring next-generation artificial intelligence (AI), cloud, and Internet of Things (IoT) capabilities to Vodafone’s markets across Europe and Africa.
The deal reflects both companies’ ambitions to be at the forefront of AI and digital transformation. By combining forces, they aim to enhance Vodafone’s customer experience, network operations, and business offerings for the 300 million consumer and enterprise customers it serves.
Transforming Customer Service with AI
A major focus of the partnership will be transforming Vodafone’s customer service using AI and natural language processing. Microsoft will provide access to its Azure OpenAI platform, including technologies like GPT-3.5 for generating conversational text.
Vodafone plans to invest heavily in building customized AI models using Microsoft’s tools. This includes enhancing TOBi, Vodafone’s digital assistant chatbot, to deliver more personalized and intelligent customer interactions across text, voice, and video channels.
More consistent and contextualized responses from TOBi could improve customer satisfaction and loyalty while reducing operational costs for Vodafone. The two companies will also collaborate on conversational AI and digital twin capabilities to optimize Vodafone’s network operations.
Transitioning to the Cloud
Another key element of the deal is transitioning Vodafone away from reliance on its own data centers. It will adopt Microsoft Azure as its preferred cloud platform, migrating workloads and infrastructure to Azure’s global footprint.
This should provide Vodafone with more flexibility, scalability, and cost efficiency. Azure’s extensive compliance and security controls will also help Vodafone meet strict regulatory requirements for its markets.
Vodafone plans to train and certify hundreds of employees as Azure experts to enable the shift. The cloud transition can allow Vodafone to retire legacy systems, consolidate data platforms, and leverage new technologies like AI more quickly.
Microsoft’s Equity Investment in Vodafone’s IoT Business
To deepen integration between the two companies, Microsoft will also become an equity investor in Vodafone’s IoT division when it spins out as a separate business in 2024.
Vodafone’s IoT platform connects over 120 million devices globally across areas like asset tracking, smart metering, and automotive. Microsoft’s investment reflects the strategic value it sees in Vodafone’s IoT leadership.
Together, they aim to scale Vodafone’s IoT solutions on Azure’s global infrastructure and combine them with Microsoft’s own IoT cloud services. This can drive faster time-to-market for new solutions. Microsoft also wants to leverage Vodafone’s IoT data and networks in sustainability and digital twin projects across multiple industries.
Empowering Mobile Finance in Africa
In Africa, the partnership has a strong focus on expanding access to mobile financial services. Vodafone operates the popular M-Pesa platform which pioneered mobile money across Eastern Africa.
Microsoft will provide AI capabilities to enhance functions like credit assessment for M-Pesa users. The goal is to drive financial inclusion and provide intelligent financial tools to the unbanked population in Vodafone’s African footprint.
Microsoft and Vodafone will also cooperate to improve digital skills and literacy for small businesses by providing bundled connectivity, devices, and software through the new partnership. This aligns with both companies’ commitments to empower digital transformation and economic opportunity in the region.
An Ambitious Partnership for the AI and Cloud Era
The scale of the newly announced partnership reflects Vodafone and Microsoft’s shared ambition to shape the future of technology and connectivity. By combining Vodafone’s reach across emerging markets with Microsoft’s leading cloud and AI enterprise offerings, they want to enable inclusive digital experiences for consumers and businesses worldwide.
The deal demonstrates the transformational power of AI and cloud to reinvent customer service, improve operational efficiency, and develop innovative business models. As 5G networks expand globally over the next decade, the partnership lays the groundwork for Vodafone to transition itself into a future-ready technology leader.
Michael Kupinski, Director of Research, Noble Capital Markets, Inc.
Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.
Refer to the bottom of the report for important disclosures
Optimism For A Good 2024. In this report, we provide our advertising outlook for 2024 and provide our best picks to play the expected advertising rebound. Our take on the year is based on an improving economic outlook, particularly in the second half of the year, and heavy influx of Political advertising. Our favorable advertising outlook is based on a resilient labor market and lower interest rates to avoid a recession in 2024.
Have we seen thetrough for this cycle? With our economic scenario in mind, we anticipate an improving economic environment in the second half of 2024. Notably, we believe that advertising trends are improving into the first quarter 2024, with the rate of decline moderating for both Radio and Television.
National advertising expected to strengthen. The weakness in National was the biggest issue for broadcasters in 2023. We believe that National advertising trends should improve in 2024 both from the perspective of a sluggish consumer in the first half and from an improving economic outlook in the second half.
How big will Political be?We anticipate a strong political advertising environment in 2024, an increase of 13% to roughly $10 billion from 2020 levels. Importantly, about half of the high margin political advertising dollars are expected to be spent with television broadcasters.
Highlights of favorite picks for 2024. Media stocks are typically early cycle stocks, which tend to outperform in the midst of the economic downturn or trough as investors begin to anticipate economic improvement. We believe media stocks are timely and offer a compelling return potential given depressed valuations. In addition, some companies pay a dividend, offering attractive total return potential.
Investment Appraisal
Optimism For A Good 2024
The fortunes of advertising based companies are driven by the economy and the health of the consumer. As such, we start this report with our take on the economy in 2024. On December 4th, at Florida Atlantic University (FAU) in Boca Raton, Florida, Noblecon19 hosted an economic panel to discuss the business environment outlook for 2024. The economic panel consisted of a diverse group of industry professionals with a wide range of expertise and experience. In our economic outlook for 2024, we take into consideration the perspective of Jose Torres, Senior Economist at Interactive Brokers.
Mr. Torres highlighted 2023 as a resilient year for consumer spending, which was driven by excess pandemic savings accumulated in 2020 and 2021. Mr. Torres anticipates a slowdown in consumer spending and a strong labor market in 2024. Notably, he believes a resilient labor market will keep consumers spending and will keep the country from falling into a recession. Additionally, Mr. Torres highlighted that Personal Consumption Expenditures (PCE) annualized inflation over the last six months is running near 2.5%, which is very close to the FED’s goal of 2.0%. With moderating inflation pressures, Mr. Torres highlighted that the FED is likely to cut rates in March of 2024, which would be beneficial for small and mid-cap companies. While Mr. Torres largely has a positive outlook for 2024 and beyond, a point of concern was the federal government’s growing interest expense on debt, he noted that the government will eventually have to reduce spending or accept 3% – 3.5% inflation over the long-term.
The general U.S. economy is expected to soften in 2024, particularly in the first half, with a prospect that the economy could slip into recession. Our economic scenario for 2024 anticipates the economy will soften in the first half of the year and rebound in the second half of the year due to the prospect of a lower interest rate environment and resilient labor market.
The video of the Economic Perspectives panel may be viewed here.
Small Cap Cycle?
Small cap investors have gone through a rough period. For the past several years, investors have anticipated an economic downturn. With these concerns, investors turned toward “safe haven” large cap stocks, which by and large can weather economic downturns and have significant trading volume should investors need to sell their positions. Notably, there is a sizable valuation disparity between the two classes, large cap and small cap, one of the largest since 1999. Some of the small cap stocks we follow trade at a modest 2.5 times Enterprise Value to EBITDA, compared with large cap valuations as high as 15 times. We believe the disparity is due to higher risk in the small cap stocks, given that some companies may not be cash flow positive, have capital needs, or have limited share float. However, investors seem to have overlooked small cap stocks with favorable fundamentals. While small cap stocks are more speculative than large caps, many are growing revenues and cash flow, have capable balance sheets, and/or are cash flow positive. In our view, the valuation gap should resolve itself over time for attractive emerging growth stocks. Some market strategists suggest that small cap stocks trade at the most undervalued in the market.
Dan Thelen, Managing Director of small cap equity at Ancora Advisors, highlighted the valuation gap between small cap and large cap stocks during the economic panel at Noblecon19 on December 5, 2023. Mr. Thelen noted that investors are not recognizing the risk mitigation efforts small cap companies have undertaken in the high interest rate environment. He believes that changes small cap companies have implemented are not reflected in stock prices and should be a tailwind moving forward. Again, his comments can be viewed on the video of the Economic Perspectives panel here.
2024 Advertising Outlook
In our advertising outlook for 2024, we take into consideration the perspective of Lisa Knutson, Chief Operating Officer (COO) of E.W Scripps. Ms. Knutson is on the frontline of the economy as one of the largest TV broadcasters in the country. As a speaker on the Noblecon19 economic panel, she depicted the local and national advertising markets as a tale of two cities. Notably, Ms. Knutson highlighted resilience in local advertising and sequential improvement over the past few quarters in the auto advertising category. Additionally, she highlighted green shoots in local advertising, particularly in the services, home improvement and retail advertising categories. Importantly, political ad spend for the 2024 election cycle is expected to be approximately $10 billion, which is roughly a 13% increase from 2020, as illustrated in Figure #1 Political Ad Spend. About half of the high margin political advertising dollars are expected to be spent with television broadcasters. Our advertising forecast for television, radio and digital are highlighted later in this report.
Figure #1 Political Ad spend
Source: Statista
Stock Recommendations
With our economic scenario in mind, we have identified certain media stocks that should perform well and/or lead the industry as economic prospects improve. Media stocks are typically early cycle stocks. This means that the stocks tend to outperform in the midst of the economic downturn or trough as investors begin to anticipate economic improvement. In addition, small cap stocks in general have been out of favor, with many stocks trading at historic low stock valuations (over the past several economic cycles) and also relative to the valuations of leadership stocks, such as the Magnificent 7 (Apple, Microsoft, Alphabet (Google), Netflix, Amazon, Nvidia and Tesla). This report highlights some of our favorite picks for 2024. Our favorites include companies that are leveraged to benefit from the influx of Political advertising and improving economy, generate positive free cash flow, and have capable balance sheets to invest it growth initiatives. Finally, we recommend stocks that have compelling valuations and/or pay a dividend to provide an attractive total return investment opportunity.
Digital Media & Technology
Decelerating Revenue Growth, But Faster Than Other Advertising Categories
Digital Advertising has been growing rapidly over the past several years, bolstered by cord-cutting trends and generally, by an increasingly digital world. Digital Advertising includes various categories of advertising, such as audio, video, influencer, search, banner, and others. According to Statista, U.S. Digital Advertising spending is expected to grow at 15% Compound Annual Growth Rate (CAGR), from 2017-2028, from $90.1 billion to $402.1 billion. Figure #2 U.S. Digital Advertising Spend illustrates the 2017-2028 forecast, which is inclusive of the various different sub-categories of Digital Advertising.
Figure #2 U.S. Digital Advertising Spend
Source: Statista
Specifically in 2024, U.S. Digital Advertising is expected to grow a healthy 10% above 2023 levels, according to Statista. There are some categories of Digital Advertising, however, that are expected to grow especially fast in 2024, such as Connected TV (CTV) advertising, programmatic advertising, and influencer advertising. All three categorizations of Digital advertising are estimated to have above-average growth in 2024. According to Statista, influencer advertising in the U.S. will grow at 14% in 2024, while, according to eMarketer, U.S. programmatic and CTV advertising will grow at 13% and 17%, respectively.
In our view, there are several key factors strengthening these verticals. For example, influencer advertising allows brands to reach younger demographics through personalities those audiences trust. Moreover, during a time when there is uncertainty around the future of cookies and other forms of User IDs for targeted advertising, influencer advertising offers an alternative vehicle for audience targeting. Google has indicated plans to no longer use 3rd party cookies to deliver advertising in 2024, although the implementation of this plan has been delayed multiple times before. Additionally, we believe cord cutting is a major factor in the growth of connected TV, likely to be a strong growth vertical for programmatic digital advertising.
Noble’s Digital Media indices fared well over the past year with most outperforming the S&P 500 over that span, as illustrated in Figure #4 Digital Media LTM Performance. Most recently, the Social Media and Marketing Tech indices have performed strongest, up 18.9% and 24.2%, respectively, over the last 3-months. Figure #3 Digital Media 3-month Performance illustrates the last quarter’s performance by Noble’s Digital Media indices. However, many of the indices were skewed positively by the strong stock performance of the larger cap constituents. For example, META was up 194% over the trailing 12 months, while Adobe (ADBE) and Salesforce (CRM) also performed well, up 77% and 98%, over the same timeframe, respectively. Yet, in Q4 the performance disparity began to abate with the smaller cap constituents of Noble’s Digital indices contributing more to the positive returns, for the most part. We believe this could signal the beginning of shift towards the smaller cap stocks that had depressed valuations in 2023 relative to their large cap counterparts.
Despite the large cap versus small cap valuation disparity in 2023, there are several small cap stocks that performed well over the past 12 months, outshining respective indices. Notably, Direct Digital Holdings (DRCT) was up roughly 500% over the past year. Most of the runup of DRCT occurred late in Q4, after the company reported results far exceeding Street estimates. In our view, DRCT was substantially undervalued and is beginning to be discovered by more investors. Importantly, the increased trading activity has put the stock on investing screens for institutional, small cap investors. Another notable small cap performance was Townsquare Media (TSQ), which has a large Digital Advertising component to its business. TSQ was up 45% in the past year.
Below, we outlined some of the investment highlights for our closely followed Digital Media companies. In addition, Figure #5 Ad Tech Industry Comparables highlights the stock valuations of the sector. As the chart depicts, our favorite stocks current trade well below the averages for the industry and some of the larger cap names. One of our closely followed companies, AdTheorent, is a stand out. Near current levels, the ADTH shares trade at a modest 2.5 times Enterprise Value to our 2024 Adj. EBITDA estimate, well below the 15.1 times average for the sector. Given the compelling stock valuation, we highlight this company as our current favorite in the industry. In addition, the Direct Digital shares trade at 10 times Enterprise Value to our 2024 Adj. EBITDA estimate, well below the 15.1 times industry average. As such, we view the DRCT shares as compelling.
Figure #3 Digital Media 3-month Performance
Source: Capital IQ
Figure #4 Digital Media LTM Performance
Source: Capital IQ
Direct Digital Holdings (DRCT) – Programmatic Advertising. We view DRCT as a compelling play on the Programmatic Advertising market. The company operates a sell-side platform (SSP), in addition to servicing buy-side advertising clients through managing their digital advertising strategies. Importantly, the company’s niche comes from its deep relationships with multi-cultural publishers, a key competitive advantage in our view. In 2024, we estimate the company’s revenue will grow 30% above our 2023 forecast with adj. EBITDA growth of 33%. For research reports and important disclosures, please click here.
AdTheorent (ADTH) – Programmatic Advertising. ADTH is a unique play on programmatic advertising with cutting-edge audience targeting capabilities, powered by its machine learning (ML) platform. Due to its ML platform, the company does not need to use third-party cookies and other forms of user IDs to target audiences. Not only does this position the company well for Google’s phasing our of third-party cookies, but it also allows the company to offer clients a privacy-forward method of audience targeting. Some key verticals for the company include the healthcare industry as well as connected TV. For research reports and important disclosures, please click here.
Townsquare Media (TSQ) – Programmatic & SMB Digital Advertising. TSQ is a media company that has transformed from primarily a radio station operator to a Digital Advertising business, boasting multiple digital verticals. We believe it is a compelling play on the digital transition occurring in small business across the country. The company provides comprehensive digital marketing services to small and medium-sized businesses in its radio markets, leveraging its deep local relationships. Additionally, the company operates a programmatic advertising business, which is benefiting from the growth of CTV. For research reports and important disclosures, please click here.
Entravision Communications (EVC) – Programmatic & Social Media Advertising. EVC is one of our favorite social media advertising plays. The company serves as Meta’s exclusive ad agency in several emerging markets, such as, certain regions of Latin America. It also represents TikTok in parts of Asia. In addition, the company owns a programmatic agency, known as Smadex. For research reports and important disclosures, please click here.
Figure #5 Ad Tech Industry Comparables
Source: Noble estimates & Company filings
Traditional Media
The Largest Caps Performed The Best
The Newspaper Index was the only traditional media sector that outperformed the general market in the past quarter and trailing 12 months, as illustrated in Figure #7 Traditional Media LTM Performance. In the latest quarter, Newspaper stocks outperformed the general market, up 20.4% versus down 11.2% for the general market as measured by the S&P 500 Index. Notably, our index performances are market cap weighted, meaning larger cap stocks have a greater impact on index return than small cap stocks. In Q4, only two stocks in the Newspaper index, NYT and NWSA, posted positive returns. These were the largest cap stocks in the index. In Q4, NWSA and NYT were up 22.4% and 18.9%, respectively. For full year 2023, four out of the five companies in the Newspaper index posted positive returns, the strongest performers were NYT and NWSA, up 50.9% and 34.9%, respectively. The Broadcast TV Index was up a modest 5.2% for the quarter and down 11% over the past year. The worst performing index over the last quarter was the Radio Broadcast index, down on 10.9%, as Illustrated in Figure #6 Traditional Media 3-Month Performance. Additionally, the Radio stocks were the worst performing group over the last year as well, down 34.9%. While the Radio Broadcast Index and Broadcast TV Index had a tough year in 2023, we believe both indices should improve in 2024. We highlight some of our favorites in the sector commentary below.
Figure #6 Traditional Media 3-month Performance
Source: Capital IQ
Figure #7 Traditional Media LTM Performance
Source: Capital IQ
Television Broadcast
Looking For A Better 2024
The Television industry had a tough year with soft core advertising and the absence of the year earlier Political advertising. Television revenues are estimated to have declined as much as 20% in 2023 inclusive of the absence of year earlier Political advertising. Total core television advertising is expected to have decline 3% in 2023, which excludes Political advertising, reflecting disproportionately weak National advertising and resilient Local advertising. Importantly, Television advertising accounts for less than 50% of total television revenue, with Retransmission revenue largely accounting for the balance. With growth in Retransmission revenue, we estimate that total Television revenue declined roughly 10% in 2023.
We believe that revenue trends will improve in 2024 for the TV industry, supported by an influx of Political advertising and moderating trends in core National advertising. Nonetheless, given the exceptional Political advertising year that is expected, core advertising is expected to decline in 2024, with some advertising being displaced by the large volume of Political. We anticipate that Core advertising will decline roughly 2.3% in 2024, with total TV advertising up nearly 30% (reflective of the influx of Political). Total Television revenue, which includes Retransmission revenues, are expected to increase roughly 20%.
We believe that the TV industry has some long term fundamental headwinds, which include continued weak audience trends, cord cutting (which adversely affects Retransmission revenue growth opportunities), and shifts in National advertising toward Digital and Influence Marketing. Offsetting these trends are Connected TV and prospects for new revenue opportunities offered by the new broadcast standard, ATSC 3.0. Importantly, the very high margin Political advertising every even year allows the industry to reduce debt and/or return capital to shareholders.
Our closely followed Television companies, E.W. Scripps and Gray TV, are among the two companies best positioned to benefit for the influx of Political advertising. Both are in swing markets that should disproportionately benefit from Political. In the case of E.W. Scripps, the company has a developed business model that benefits from cord cutting as consumers switch toward Connected TV and Over The Air Networks. Furthermore, in 2024, E.W. Scripps will benefit from double digit growth in Retransmission revenue as 75% of its subscribers have been renegotiated at significantly higher rates. Both companies, E.W. Scripps and Gray, are highly debt levered. As such, we believe that paring down debt should improve the equity value of the shares in 2024. In addition, we believe that both companies have compelling stock valuations. While the SSP and the GTN shares trade near the industry averages, the industry averages are well below past cycles. We would look for multiple expansion as economic prospects improve. At the same time, as free cash flow improves from high margin Political advertising, debt reduction should allow for a swing toward improved equity values. As such, the shares of SSP and GTN represent a compelling way to play both an improved economic outlook towards the second half of 2024 and influx of high margin Political advertising. Again, SSP has the benefit of strong growth of Retransmission revenue, as well.
E.W. Scripps (SSP): One of the nation’s largest TV station broadcasters and unique play on the trend toward cable cord cutting. Scripps has nationwide over the air networks that can be viewed with a digital antennae that do not require a cable or satellite service. Given its orientation toward national networks, the company is expected to disproportionately benefit from the influx of national advertising. In addition, the company’s TV stations are located in swing States and in hotly contested markets that should benefit from the influx of Political advertising in 2024. We believe the level of Political will be closely watched by investors as the high margin Political advertising will allow the company to aggressive pare down debt, assuaging investor concerns over its current leverage. For research reports and important disclosures, please click here.
Gray Television (GTN): One of the nation’s largest television broadcasters, the company has historically led the industry in terms of revenue and disproportionately benefits from the influx of Political advertising. In addition, the company is expected to benefit in 2024 from its investment in the development of its studios in the Atlanta area called Assembly Atlanta. The company has yet to disclose the full benefit of the current lease arrangement. We believe that the value of the development and the stream of lease payments are not fully reflected in the current stock valuation. Furthermore, the company is expected to aggressively pare down debt through the influx of high margin Political advertising and the lease payments. In our view, the shares should react well to debt reduction. For research reports and important disclosures, please click here.
Figure #8 TV Industry Comparables
Source: Noble estimates & Company filings
Radio Broadcast
Debt Struggles
Based on our estimates and our closely followed companies, Radio advertising is expected to have decreased 5.5% for the full year 2023. Illustrated in Figure #9 Radio Advertising Revenue. This decline reflected the adverse impact of rising interest rates and significant inflation, which hurt many consumer oriented advertising categories, as well as financials. In addition, we believe that Radio struggled with some headwinds from declines in listenership, as many consumers continue to work remotely post Covid pandemic. Local advertising was more resilient than National, which tends to be more economically sensitive. We estimate that Local advertising was down 6%, while National was down 19%. The results are expected to reflect the absence of Political advertising from the year earlier biennial elections. Digital advertising was a bright spot, increasing 6%, largely offsetting the decline in National revenue.
Figure #9 Radio Advertising Revenue
Source: Statista
Looking forward toward 2024, we expect Radio advertising trends to improve throughout the year, with the expectation that December 2023 may have been the trough for this economic cycle. Both Local and National advertisers should begin to anticipate improved economic conditions with the expectation that the Fed will lower interest rates late in the first quarter. Even though the economy is anticipated to continue to weaken in the first half 2024, advertisers may advertise to drive customer traffic and in anticipation of improved economic conditions. We anticipate that the year will start off weak, with the first quarter 2024 revenue expected to be down, but a more moderate decrease between 3% to 4%. Notably, the industry does not receive a significant amount of Political advertising in the first quarter.
In 2024, we expect consumer spending to soften, which will have an adverse affect on consumer oriented advertising, particularly Retail. Auto advertising is expected to buck that trend. In our view, auto manufacturers and dealers will likely step up advertising and promotions to lure consumers. Assuming lowered interest rates, we expect that Financial advertising should improve in the second half of the year, as well. Revenues are expected to be second half weighted, with improving core advertising trends and the benefit of the influx of Political advertising. Radio does not typically receive a significant amount of Political advertising, but it accounts for a meaningful 3% of total core advertising for the year. Political advertising largely falls in the third and fourth quarter. In addition, National advertising trends should improve in the second half as economic prospects improve. Digital advertising is expected to grow but more moderately than 2023, which is expected to be up 6%. We believe that Digital will increase near 5%, but some companies that have less developed Digital businesses, should report faster growth.
In total, based on our closely followed companies, we anticipate Radio revenue growth of 5.6% in 2024. Our estimate is inclusive of our Political advertising outlook.
We encourage investors to take a basket approach to investing in the industry, as most companies should benefit from the improving fundamentals in 2024. Below we have outlined some of the investment highlights for our closely followed Radio companies. In addition, Figure #10 Radio Industry Comparables highlight the stock valuations of the sector, which are currently trading at recession type valuations levels.
Beasley Broadcast (BBGI): We believe that the company will reflect above average revenue and cash flow growth in 2024 due to the prospect of fast growth of its developing Digital businesses. Digital accounted for roughly 20% of the company’s total revenues in 2023 and are expected to be a key revenue driver in 2024. In addition, the company’s stations are located in large, swing State markets and should benefit from the influx of Political advertising. The company does carry above average debt loads, but we expect that the company will pare down debt by roughly $20 million from current levels. The company’s target debt levels are $250 million by year end. For a Beasley Broadcast report and important disclosures, please click here.
Cumulus Media (CMLS): The company is viewed as a leveraged play on a recovery in National advertising. Given the company’s Network business, which is virtually all National advertising, roughly 50% of total company revenues are derived from National advertising. This is significantly higher than the industry average, which is roughly 12%. National advertising is expected to rebound as economic prospects improve in 2024. In addition, the company should disproportionately benefit from the influx of Political advertising. We estimate $23.5 million in high margin Political advertising, a 20% increase from the last Presidential election cycle, expected to total roughly 3.7% of 2024 advertising revenues. For research reports and important disclosures, please click here.
Entravision (EVC): Radio represents a small portion of total company revenues as the company has transitioned toward a Digital agency business model. Over 80% of total company revenues comes from its Digital businesses. As such, Entravision should grow faster than Radio industry averages as its Digital business is expected to grow. Furthermore, Entravision has one of the best balance sheets in the industry, expected to have virtually no net debt by year end. Finally, the EVC shares are among the cheapest in the industry, as highlighted in Figure # Radio Industry Comparables. For research reports and important disclosures, please click here.
Saga Communications (SGA): Historically, the company has led the industry in terms of revenue and cash flow growth. Over the past few years, it lost that honor as the industry moved to expand its fast growing digital operations. Most recently, Saga has regained its top spot as it has developed its Digital operations and non traditional radio revenue. While the industry has moved Digital to account for as much as 50% of total company revenues, Saga currently is at a more modest %. Nonetheless, its nascent Digital operations are growing at a rapid rate, allowing total company revenues to exceed industry averages. Saga has one of the best balance sheets in the industry, with a large cash position and virtually no debt. Furthermore, the company pays an attractive dividend, and, as such, represents an attractive total return potential. The SGA shares are largely undiscovered, trading at one of the cheapest stock valuation in the radio sector. For research reports and important disclosures, please click here.
Salem Media Group (SALM): Salem has a relatively stable Radio advertising business given its orientation toward the sale of long and short form block programming. Recently, the company tripped a debt covenant which created investor anxiety over its high debt leverage. The company recently announced that it plans to sell its Salem Church Products division for $30 million, it refinanced its revolver, and announced the sale of its money losing book publishing company, Regnery. In addition to these measures, the company has streamlined its management team and lowered costs. Recently, the company decided to delist, rather than seek alternatives to remain on its current exchange. In addition, the company has not closed on its planned sale of its Church Products division. As such, we believe that the company has significant hurdles to put itself on a path toward free cash flow generation and debt reduction. For research reports and important disclosures, please click here.
Townsquare Media (TSQ): Townsquare has led the charge toward a Digital transformation, with over 50% of its revenues from its Digital businesses. Importantly, its Digital businesses have margins are in line or better than its traditional Broadcast business. While a segment of its Digital business declined in 2023, we expect that it will regain its revenue momentum in 2024, particularly in the second half. At that time, the company is expected to benefit from an influx of high margin Political advertising, as well. We believe that the company has one of the best Digital strategies in the industry and is widely viewed as the model for other aspiring Digital divisions at other Radio companies. The shares trade below that of its industry peers, in spite of its above average revenue and cash flow growth. For research reports and important disclosures, please click here.
Figure #10 Radio Industry Comparables
Source: Noble estimates & Company filings
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Senior Equity Analyst focusing on Basic Materials & Mining. 20 years of experience in equity research. BA in Business Administration from Westminster College. MBA with a Finance concentration from the University of Missouri. MA in International Affairs from Washington University in St. Louis. Named WSJ ‘Best on the Street’ Analyst and Forbes/StarMine’s “Best Brokerage Analyst.” FINRA licenses 7, 24, 63, 87
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The U.S. government is making a strategic $162 million bet on accelerating domestic semiconductor manufacturing capabilities through a major grant for Microchip Technology. The move aims to strengthen supply chain security for critical technologies while reducing dependence on overseas chip production.
Announced by the Department of Commerce, the funding will help Microchip Technology significantly expand output of mature-node semiconductors and microcontroller units at two fabrication plants in the United States.
The boosted stateside capacity for these legacy chips, used across autos, consumer devices, telecom infrastructure, aerospace and defense, is a core tenet of the Biden administration’s “Chips for America” initiative to rebuild domestic chipmaking.
For investors, the government subsidization provides a buffer against supply shocks in key end-markets for Microchip and peers specializing in current-generation chips. The build-out of U.S. semiconductor infrastructure also unlocks new revenue opportunities associated with “onshoring” trends.
Strategic Tech Security Play
The $162 million grant, which still requires finalization, represents the second major award under the Chips for America program passed by Congress in 2022. The legislation allocated $52.7 billion towards strengthening U.S. semiconductor R&D and manufacturing.
The hefty government funding aims to insulate the U.S. from the global chip shortages and supply chain disruptions experienced during the pandemic, which rippled across the auto sector, consumer appliance makers, and other key domestic industries.
“The award will help reduce reliance on global supply chains that led to price spikes and long wait lines for everything from autos to washing machines during the pandemic,” said Lael Brainard, Director of the White House National Economic Council.
The U.S. chip funding arrives amid mounting concern over economic and national security risks associated with foreign chipmaking dominance. America now accounts for only 12% of worldwide semiconductor manufacturing, down from 37% in 1990, according to SIA data. Meanwhile, East Asia now represents 75% of fabrication, led by Taiwan at 92% of the advanced chips market.
As chips become more vital for technologies like EVs, 5G, and AI, U.S. officials seek to curb dependence on overseas production capacity to ensure domestic tech leadership. The risks became evident as COVID-related shutdowns drove severe chip shortages.
Doubling Down on Legacy Chip Lines
The direct grants to Microchip Technology will expand legacy chip production at the firm’s factories in Colorado and Oregon. Microchip specializes in microcontroller, analog, and flash memory chips used in everything from cars to defense systems.
The $90 million Colorado facility investment will triple output of 8-inch wafers for mature-node integrated circuits. The $72 million Oregon fab funding will double microcontroller manufacturing.
The ramped up legacy chip capacities reinforce Microchip’s competitive position as demand intensifies for current-generation semiconductors across tech and automotive. The expansions build on the firm’s January announcement of an $800 million investment to triple Oregon fab output.
For investors, the state support helps de-risk Microchip’s domestic production scale-up amid turbulent macroeconomic conditions and provides a backstop as management executes its capacity roadmap.
The funding also spotlights the ongoing critical role of mature node chips, even as leading-edge semiconductors grab headlines. While crucial for advanced chips, restoring U.S. leadership in legacy nodes directly serves major industries where shortages have hammered bottom lines.
First Moves in U.S. Chip Reshoring
The planned Microchip award marks an early win under the broader Chips and Science Act Passed by Congress. The bipartisan legislation codified semiconductor manufacturing and R&D funding as a strategic priority, authorizing $52 billion in incentives.
The law sets aside $39 billion in semiconductor manufacturing subsidies, $11 billion for R&D, and $2 billion for legacy chip production – recognizing the outsized importance of lagging U.S. capacities in mature node manufacturing.
The Microchip grants constitute the second such funding award under the Act, following $35 million granted in December to a BAE Systems semiconductor facility that produces chips for defense platforms.
But this represents merely the tip of the iceberg, with Commerce Secretary Gina Raimondo forecasting about a dozen total semiconductor subsidy awards in 2024 potentially worth billions each. The incoming wave of sizeable incentives promises to radically reshape the domestic chipmaking landscape.
For institutional investors, the government initiatives lend viability to plans from Intel, Micron, and other U.S. firms to build large-scale domestic fabrication plants. The investments will drive growth while reducing exposure to offshore production risks.
The amplified U.S. chipmaking capacities will also benefit semiconductor equipment providers and material/gas suppliers up and down the supply chain. As the push accelerates in 2023 and 2024, investors have an opportunity to position for the resshoring trend.
Overall, the expansion of U.S. chip fabrication driven by the incoming subsidies provides a long-term structural tailwind. With semiconductors only becoming more indispensable, boosting domestic manufacturing enhances the tech independence and leadership vital for national security interests. The Microchip awards represent an early step on the path towards reclaiming domestic chip dominance.
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, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Enhancing Flexibility. Last week, Comtech filed a form 8-K revealing changes in the terms of its Series A Convertible Preferred Stock to enhance the Company’s financial flexibility. Essentially, Comtech is exchanging on a one-for-one basis the existing Series A Convertible Preferred shares for a new class of Series A-1 Convertible Preferred. With Comtech deep in negotiations to refinance its credit facility, any additional flexibility is a positive, in our view.
Ability to Raise $50 Million. For Comtech, the key change is the ability to issue up to $50 million of shares of common stock without the consent of the preferred holders, anytime through October 31, 2024. We would anticipate any funds raised through the issuance of new equity to be used to de-lever the Company.
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*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.
Blackboxstocks, Inc. is a financial technology and social media hybrid platform offering real-time proprietary analytics and news for stock and options traders of all levels. Our web-based software employs “predictive technology” enhanced by artificial intelligence to find volatility and unusual market activity that may result in the rapid change in the price of a stock or option. Blackbox continuously scans the NASDAQ, New York Stock Exchange, CBOE, and all other options markets, analyzing over 10,000 stocks and up to 1,500,000 options contracts multiple times per second. We provide our users with a fully interactive social media platform that is integrated into our dashboard, enabling our users to exchange information and ideas quickly and efficiently through a common network. We recently introduced a live audio/video feature that allows our members to broadcast on their own channels to share trade strategies and market insight within the Blackbox community. Blackbox is a SaaS company with a growing base of users that spans 42 countries; current subscription fees are $99.97 per month or $959.00 annually. For more information, go to: www.blackboxstocks.com .
Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Evtec Aluminum. Blackbox announced that the Company has executed a definitive agreement to acquire Evtec Aluminum Limited. The transaction is expected to close in the first quarter of 2024 and is subject to customary closing conditions including but not limited to regulatory, lender, and stockholder approval.
What is Evtec Aluminum? Evtec Aluminum is a supplier of proprietary mission critical parts for the Electric Vehicle, Hybrid, Performance, and Luxury OEM automotive markets. They supply parts to brands such as JLR (formerly Jaguar Land Rover), Aston Martin, Ford, Bentley, and auto suppliers including Dana, American Axle, Cox Powertrain, among others.
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This Company Sponsored 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.
ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For additional information, visit www.ISG-One.com
Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
NobleCon19. Information Services Group CEO Michael Connors and CFO Michael Sherrick presented at NobleCon19. Management highlighted how ISG’s service can enable clients to be more efficient and effective in the deployment of their technology, a focus on recurring revenue and growth, and returning value to shareholders. A rebroadcast is available at https://www.channelchek.com/videos/information-services-group-noblecon19-replay.
Recurring Revenue. Recurring revenue for the Company has been about $125 million over the trailing twelve months, and has accounted for 42% of firm-wide total revenue year-to-date. ISG has set a new Company goal of $150 million in annual recurring revenues by 2025 and we believe that the Company can achieve this goal.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
This Company Sponsored 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.
As artificial intelligence continues its seemingly unstoppable rise, tech giants are racing to power the next generation of AI applications. This week, Amazon Web Services unveiled its latest salvo directed squarely at sector leader Nvidia – the new Trainium2 AI training chip. Promising up to quadruple the performance of its predecessor, Trainium2 represents Amazon’s most aggressive move yet to challenge Nvidia’s dominance in the white-hot AI chip space.
Nvidia’s GPUs Fuel Explosive Growth of AI
Over the past decade, Nvidia has capitalized on the AI boom more than any other company. Its graphics processing units, or GPUs, first designed for video gaming proved remarkably adept at accelerating machine learning. Aggressive investments in its Tensor Core GPU architecture tailored specifically for AI workloads cemented Nvidia’s status as the chipmaker of choice for everything from natural language AI like ChatGPT to computer vision, robotics and self-driving vehicles.
Demand for Nvidia chips now far outstrips supply, as businesses of all stripes rush to infuse AI capabilities into their operations. The company’s data center revenue expanded sharply in its most recent quarter, overtaking its gaming segment for the first time, demonstrating the commercial appetite for its AI offerings. Nvidia also boasts partnerships expanding its reach, including an alliance with Microsoft to power Azure’s AI cloud infrastructure.
Can Trainium2 Take on Nvidia’s AI Dominance?
This is the competitive landscape now facing Trainium2 as Amazon seeks to grow its 7% share of the nearly $61 billion AI chip market. Boasting 58 billion transistors, far greater than Nvidia’s offerings, and advanced compression technology minimizing data movement, the second-generation Trainium aims to match or beat Nvidia’s training performance at lower cost.
Crucially for Amazon Web Services customers, Trainium2 optimizes TensorFlow, PyTorch and MXNet, among the most popular open-source AI frameworks. It can also handle multi-framework workloads simultaneously. Amazon is counting on these features combined with integrated tools for scaling model training to convince AI developers and businesses to give Trainium2 a look over Nvidia’s ubiquitous GPUs.
Still, Nvidia isn’t standing still. Its latest H100 GPU packs 80 billion transistors enabling an order of magnitude performance leap over previous generations. Plus, Nvidia’s CUDA programming framework and expansive software ecosystem powering over 2.3 million AI developers globally cannot be easily dismissed.
The AI Chip Wars Have Only Just Begun While Trainium2 faces stiff competition, its arrival underscores how vital the AI chip space has become. Amazon is also expanding collaboration with Nvidia, incorporating H200 GPUs into AWS infrastructure so customers can access Nvidia’s most advanced AI hardware. With AI poised to unleash a new industrial revolution, expect the battle for chip supremacy powering everything from intelligent search to autonomous robotaxis to keep heating up.
Chipmaker Nvidia (NVDA) is slated to report fiscal third quarter financial results after Tuesday’s closing bell, with major implications for tech stocks as investors parse the numbers for clues about the artificial intelligence boom.
Heading into the print, Nvidia shares closed at an all-time record high of $504.09 on Monday, capping a momentous run over the last year. Bolstered by explosive growth in data center revenue tied to AI applications, the stock has doubled since November 2022.
Now, Wall Street awaits Nvidia’s latest earnings and guidance with bated breath, eager to gauge the pace of expansion in the company’s most promising segments serving AI needs.
Consensus estimates call for dramatic sales and profit surges versus last year’s third quarter results. But in 2022, Nvidia has made beating expectations look easy.
This time, another strong showing could validate nosebleed valuations across tech stocks and reinforce the bid under mega-cap names like Microsoft and Alphabet that have ridden AI fervor to their own historic highs this month.
By contrast, any signs of weakness threatening Nvidia’s narrative as an AI juggernaut could prompt the momentum-driven sector to stumble. An upside surprise remains the base case for most analysts. But with tech trading at elevated multiples, the stakes are undoubtedly high heading into Tuesday’s report.
AI Arms Race Boosting Data Center Sales
Nvidia’s data center segment, which produces graphics chips for AI computing and data analytics, has turbocharged overall company growth in recent quarters. Third quarter data center revenue is expected to eclipse $12.8 billion, up 235% year-over-year.
Strength is being driven by demand from hyperscale customers like Amazon Web Services, Microsoft Azure, and Alphabet Cloud racing to build out AI-optimized infrastructure. The intense competition has fueled a powerful upgrade cycle benefiting Nvidia.
Now, hopes are high that Nvidia’s next-generation H100 processor, unveiled in late 2021 and ramping production through 2024, will drive another leg higher for data center sales.
Management’s commentary around H100 adoption and trajectory will help investors gauge expectations moving forward. An increase to the long-term target for overall company revenue, last quantified between $50 billion and $60 billion, could also catalyze more upside.
What’s Next for Gaming and Auto?
Beyond data center, Nvidia’s gaming segment remains closely monitored after a pandemic-era boom went bust in 2022 amid fading consumer demand. The crypto mining crash also slammed graphics card orders.
Gaming revenue is expected to grow 73% annually in the quarter to $2.7 billion, signaling a possible bottom but well below 2021’s peak near $3.5 billion. Investors will watch for reassurance that the inventory correction is complete and gaming sales have stabilized.
Meanwhile, Nvidia’s exposure to AI extends across emerging autonomous driving initiatives in the auto sector. Design wins and partnerships with electric vehicle makers could open another massive opportunity. Updates on traction here have the potential to pique further interest.
Evercore ISI analyst Julian Emanuel summed up the situation: “It’s still NVDA’s world when it comes to [fourth quarter] reports – we’ll all just be living in it.”
In other words, Nvidia remains the pace-setter steering tech sector sentiment to kick off 2024. And while AI adoption appears inevitable in the long run, the market remains keenly sensitive to indications that roadmap is progressing as quickly as hoped.
Annual awards honor technology and business service providers that deliver the highest level of customer service to enterprise clients
LONDON–(BUSINESS WIRE)– Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm, last night presented the 2023 ISG Star of Excellence Awards™ to Accenture, HCLTech and TCS, recognizing the three service providers for consistently demonstrating the highest standards of customer service excellence in the past year, based on direct feedback from enterprise customers.
In a ceremony at the ISG Sourcing Industry Awards Gala Dinner, held at the conclusion of the ISG Sourcing Industry Conference at the Park Plaza Victoria London, the providers were awarded the sixth annual overall ISG Star of Excellence Awards for earning the highest cumulative customer experience scores across all regions, industries and technology areas.
The ISG Star of Excellence Awards, part of the ISG Provider Lens™ research program, is the premiere industry recognition for the technology and business services industry. Providers are ranked on the quality of their services based on direct feedback from enterprise customers in the areas of Business Continuity and Flexibility; Collaboration and Transparency; Execution and Delivery; Governance and Compliance; Innovation and Thought Leadership, and People and Cultural Fit.
The winners are chosen from among a group of more than 2,000 service providers and vendors ISG analyzes and evaluates each year. This year, ISG received feedback from enterprise clients with roles in IT, operations, lines of business, procurement and vendor management and other areas, and operating in the Americas, EMEA and Asia Pacific.
In addition to the overall ISG Star of Excellence Award winners, last night’s ceremony recognized:
The top provider for each emerging technology area, with Hexaware named the universal winner for emerging technology;
The top provider for the Americas (Microland), EMEA (Stefanini) and Asia Pacific (TCS), with Genpact receiving the Global Award;
The top provider for each industry, with Persistent Systems named the universal industry winner;
The top ITO provider for each technology area, with HCLTech named ITO universal technology winner;
The top BPO provider by service area, with HCLTech named the universal BPO winner.
HCLTech was presented with a total of six awards across all categories, TCS a total of four awards and Persistent Systems a total of four awards. A complete list of winners can be found here.
Paul Gottsegen, president of ISG Research and Client Experience, noted the importance of customer feedback to the continued advancement of the entire industry.
“In 2023, more enterprises than ever shared their provider experiences through the ISG Star of Excellence program. This valuable feedback helps providers see themselves through the eyes of their customers and deepens ISG’s understanding of providers to support our research and sourcing advisory services,” said Gottsegen. “We are pleased to see the CX scores of providers are rising, even as clients’ expectations are increasing, especially around innovation and thought leadership.”
The ISG Star of Excellence™ CX research program scores and ranks providers based on customer survey responses. Ongoing surveys ask enterprises to rate their experiences with hundreds of IT and business services providers across industries, regions and technologies. The research goes beyond general satisfaction to explore, in depth, customer experiences with specific services and solutions offered by providers—research that is tied directly to ISG Provider Lens™ quadrant evaluations.
For more information on the ISG Star of Excellence™ continuous CX research program, visit this webpage. Service providers can nominate their customers to be a part of the program at any time throughout the year.
About ISG Provider Lens™ Research
The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG’s global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG’s enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.
A companion research series, the ISG Provider Lens Archetype reports, offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.
About ISG
ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.
One Stop Systems, Inc. (OSS) designs and manufactures innovative AI Transportable edge computing modules and systems, including ruggedized servers, compute accelerators, expansion systems, flash storage arrays, and Ion Accelerator™ SAN, NAS, and data recording software for AI workflows. These products are used for AI data set capture, training, and large-scale inference in the defense, oil and gas, mining, autonomous vehicles, and rugged entertainment applications. OSS utilizes the power of PCI Express, the latest GPU accelerators and NVMe storage to build award-winning systems, including many industry firsts, for industrial OEMs and government customers. The company enables AI on the Fly® by bringing AI datacenter performance to ‘the edge,’ especially on mobile platforms, and by addressing the entire AI workflow, from high-speed data acquisition to deep learning, training, and inference. OSS products are available directly or through global distributors. For more information, go to www.onestopsystems.com.
Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
New Win. One Stop Systems, Inc. (OSS), has won a multi-million-dollar program with Leidos’ Dynetics, a provider of mission-critical solutions for the U.S. government. The new award with a new client illustrates management’s focus on broadening end markets and client relationships, in our view.
Contract Details. Valued at approximately $2.5 million to $3.5 million over the next three years, with an initial award of $500,000, the award is the first multi-year win OSS has secured with this prime contractor. OSS will provide its proprietary transportable compute and storage technology designed to power an emerging specialized mobile AI signal collection application.
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This Company Sponsored 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.
Blackboxstocks, Inc. is a financial technology and social media hybrid platform offering real-time proprietary analytics and news for stock and options traders of all levels. Our web-based software employs “predictive technology” enhanced by artificial intelligence to find volatility and unusual market activity that may result in the rapid change in the price of a stock or option. Blackbox continuously scans the NASDAQ, New York Stock Exchange, CBOE, and all other options markets, analyzing over 10,000 stocks and up to 1,500,000 options contracts multiple times per second. We provide our users with a fully interactive social media platform that is integrated into our dashboard, enabling our users to exchange information and ideas quickly and efficiently through a common network. We recently introduced a live audio/video feature that allows our members to broadcast on their own channels to share trade strategies and market insight within the Blackbox community. Blackbox is a SaaS company with a growing base of users that spans 42 countries; current subscription fees are $99.97 per month or $959.00 annually. For more information, go to: www.blackboxstocks.com .
Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
3Q2023 Results. Revenue for the Company was $728,468 compared to $1.2 million last year. Average monthly revenue per user was $76.37 for the quarter compared to $78.19 in the prior year period. Operating expenses totaled $1.3 million compared to $1.9 million last year. Blackboxstocks reported a net loss of $671,745 or EPS loss of $0.21, compared to a net loss of $1.3 million or $0.40 EPS loss last year. Adjusted EBITDA was a negative $513,026 versus a negative $1.1 million in the prior year.
Member Count. Blackboxstocks had an average member count of 3,174 at the end of the quarter, down from 3,937 at the end of the second quarter and 5,197 last year. This continues a trend of decreasing users experienced by the company on its products for the year. The Company is exploring strategic marketing partnerships to increase the growth of its products.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
This Company Sponsored 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.
