Industry Overview - The Zacks Communication - Infrastructure industry is benefiting from increased user demand for digital innovations, leading to fiber densification and extensive 5G deployment [1] - Industry players provide various infrastructure solutions for communication networks, including high-speed network access solutions and fiber-to-home equipment [3] Current Trends - There is a focus on higher average revenue per user as firms transition from legacy copper-based telecommunications to technology-driven models, leveraging wireline momentum and improving customer service [4] - Network convergence is gaining precedence, with operators combining voice, video, and data communications into a single network to minimize service delivery costs and expand coverage [6] Challenges - High raw material prices due to inflation and geopolitical tensions are affecting operations and profitability, with extended lead times for components likely to escalate production costs [5][8] - Short-term margins are at stake due to increased demand for advanced networking architecture, leading to higher infrastructure investments that compromise immediate profitability [7] Market Performance - The Zacks Communication - Infrastructure industry has outperformed the broader Zacks Computer and Technology sector and the S&P 500, surging 102% over the past year compared to 19.3% and 29.6% for the S&P 500 and sector, respectively [11] Valuation - The industry is currently trading at a trailing 12-month EV/EBITDA of 7.45X, significantly lower than the S&P 500's 18.01X and the sector's 18.53X [14] Key Companies - **CommScope Holding Company, Inc.**: A leading provider of infrastructure solutions, with a focus on cost-cutting and core operations. The stock has gained 210.8% in the past year and has a Zacks Rank 1 (Strong Buy) [17] - **Bandwidth Inc.**: A CPaaS provider with a strong API platform, enabling enterprises to scale communications functionalities. The stock has a Zacks Rank 3 (Hold) and has seen a 9.7% upward revision in earnings estimates [19][20]