Public Markets

FOCUS’ Enterprise-Focused Telecom Technology Index (EFTTI) was back in the red this period, albeit with a slight loss of only 1.0%.This compared to a flat performance for the S&P 500 and a modest gain of 1.6% for the NASDAQ. Even with this period’s loss, the EFTTI is still up strongly for the full year with a 12-month gain of 23.4%. This puts it more or less in the middle of the 7.7% gain in the S&P 500 and the 31.6% gain in the NASDAQ over the corresponding time frame. Sector multiples are also higher than at this same time last year. The sector revenue multiple increased from 4.1x to 5.2x, while the sector EBITDA multiple went from 17.0x to 20.4x.

Public Markets For the second straight reporting period the FOCUS ...

Public Markets

For the second straight reporting period the FOCUS Tele- com Business Services Index (TBSI) managed a positive return but still underperformed the broader indices. The TBSI gained 1.0% over the past three months, but the S&P 500 and NASDAQ gained 8.5% and 11.0%, respectively, over the same time frame. The TBSI remains in negative territory for the full year period with a drop of 5.7%. Once again this compares unfavorably to strong gains in both the S&P 500 (up 13.0% year-over-year) and the NASDAQ (up 39.6% year-over-year).The sector revenue multiple held steady compared to the year-ago period at 0.6x. However, the sector EBITDA multiple has declined over the past 12 months from 8.5x to 7.4x.

Public Markets

FOCUS’ Carrier-Focused Telecom Technology Index (CFTTI) returned to the red this period with a three-month loss of 1.3%. This looks particularly bad in the context of the performance of the broader indices, with the S&P 500 up 15.0% and the NASDAQ up 24.1% over the corresponding time period. The sector still remains in positive territory for the full year with a 12- month gain of 3.1%. Even so, this gain significantly underperformed both the 19.9% gain in the S&P 500 and the 46.9% gain in NASDAQ over the past year. Multiple performance for the CFTTI is mixed.The sector revenue multiple ticked up slightly from 2.2x a year ago to 2.3x currently, while the sector EBITDA multiple declined from 11.9x to 11.3x.

Public Markets

After dipping slightly in our spring report, the Enterprise-Focused Telecom Technology Index (EFTTI) roared back in our summer period to past a three-month gain of 23.9%. Every single sub sector in the index was in positive territory, and three of the five sub sectors posted double digit gains.The EFTTI’s gains compared favorably to both the 12.3% gain in the S&P 500 and the 20.9% gain in the NASDAQ over the corresponding time period.This period’s strong performance was also good enough to bring the sector into the black for the full year period with a gain of 10.4%.This is on par with the year-over-year gain in the S&P 500 of 9.8%, but significantly lags the 31.4% gain in the NASDAQ. Sub sector multiples recovered nicely and are now higher than they were this same time last year. The sector revenue multiple increased from 4.8x to 5.3x, while the sector EBITDA multiple inched up from 20.0x to 20.9x.

Public Markets

The FOCUS Telecom Business Services Index (TBSI) benefitted from the overall market correction to March’s downturn and grew 17.4% over the past three months. Despite this strong performance, the sector still underperformed both the 20.0% gain in the S&P 500 and the 30.6% rise in the NASDAQ over the corresponding time period.The trend is similar for the full year period as the TBSI dropped 2.5% compared to 5.4% and 25.6% increases in the S&P 500 and NASDAQ indices, respectively. The sector revenue multiple held steady compared to this same time last year at 0.6x. However, the EBITDA multiple for the sector fell from 8.6x a year ago to 7.4x currently after a March low of 5.9x.

Public Markets

The FOCUS Communications Service Provider Index (CSPI) rebounded strongly from the steep decline in our spring report to post a gain of 10.4% in the past three months. Even so, this period’s gains still did not erase all of the losses from the spring. In addition, the CSPI also significantly underperformed both the 20.0% gain in the S&P 500 and the 30.6% gain in the NASDAQ over the corresponding time period. The sector also underperformed the broader indices for the full year as the year-over-year loss of 3.3% in the CSPI compares unfavorably to both the 5.4% gain in the S&P 500 and the 25.6% gain in the NASDAQ. Sector multiples are largely consistent with where they were a year ago. The sector revenue multiple dipped slightly from 2.8x to 2.7x, while the sector EBITDA multiple held steady at 7.8x.

Public Markets

After four straight reports with negative returns, the Carrier-Focused Telecom Technology Index (CFTTI) finally bounced back with a strong return of 12.6% in our summer reporting period. This outperformed both the S&P 500 (up 3.1%) and the NASDAQ (up 10.8%) by a wide margin. Even with this period’s strong performance, the CFTTI still significantly lags the broader indices over the full year. The CFTTI is stuck in negative territory with a 12-month loss of 3.5%, while the S&P 500 and NASDAQ are up 10.6% and 27.3%, respectively, over the course of the past year. Multiples are also slightly lower for the sector compared to the year-ago period. The sector revenue multiple dropped from 2.5x to 2.4x, and the sector EBITDA multiple fell from 14.0x to 11.5x.

Public Markets

While a 2.0% drop in the Focus Enterprise-Focused Telecom Technology Index (EFTTI) over the course of a three-month period would normally be considered disappointing, given the current environment for public equities it seems like a victory. This is highlighted by comparing it to the three-month drop in the S&P 500 of nearly 10%, and it also beats out the 2.9% decline in the NASDAQ over the same time frame. Sector performance is not as strong when measured over the full year period as the 11.9% decline in the EFTTI stacks up unfavorably compared to the 1.1% decline in the S&P 500 and the 9.8% gain in the NASDAQ. Sector multiples are also down significantly compared to this same time last year.The sector revenue multiple dropped nearly a full turn from 4.8x to 4.0x, while the sector EBITDA multiple fell from 20.3x to 16.6x.

Public Markets

Not surprisingly given the current state of the public markets, it was a challenging three-month period for the FOCUS Communications Service Provider Index (CSPI). The sector plummeted just shy of 20% over this time frame, which was roughly in-line with the 20.0% drop in the S&P 500 but greater than the 14.2% drop in the NASDAQ over the corresponding time frame.The situation looks a bit better when measured over the full year period.The CSPI was down only 9.3% in the past 12 months, although once again this underperforms both the S&P 500 (down 8.8%) and the NASDAQ (down 0.4%). Sector multiples are lower than they were in the year-ago period, although the drop is not as dramatic as we might have feared.The sector revenue multiple dipped from 2.7x t0 2.5x, while the sector EBITDA multiple fell from 8.0x to 7.2x.