Overview
With a three-month gain of 11.3%, the FOCUS Telecom Technology Index (TTI) handily outperformed the broader indices. The S&P 500 was up only 7.0% over this same time frame, while the NASDAQ had an even lower return of 5.8%. This period’s strong gain pushed the year-over-year return for the TTI up to 5.8%. However, when viewed over the last twelve months, the TTI significantly under performed both the 25.3% gain in the S&P 500 and the 26.2% gain in the NASDAQ.Sector multiples closed out the period at 2.9x revenue and 15.4x EBITDA. Both of these are meaningfully higher than year-ago multiples of 2.5x revenue and 13.6x EBITDA.
The TTI’s gains this period were broad-based, as every single sub sector turned in a positive performance. Broadband Wireless led the way with a three-month gain of 31.9%. This was largely the result of a 35.2% gain at Ubiquiti Networks. In contrast, fellow fixed wireless access company Cambium shed nearly half of its value with a loss of 46.1%. Another sub sector that performed well was Enterprise Networking, which gained 17.4% in our fall reporting period. Extreme Networks was the top performing stock in this sub sector with a gain of 41.3%. Other switching companies such as Aerohove and Arista Networks also delivered double digit gains. Finally, strong performances by both CIENA and Harmonic helped to push the Broadband Access and Transport sub sector up 15.5% over the past three months.
