Stock market watcher Seeking Alpha sees good things ahead for Frontier Communications (Nasdaq: FTR), a telco provider for rural and small communities in 27 states that, like many smaller carriers, has been challenged by both the stagnant economy and technological change.
"Analysts and community are almost equally bullish about Frontier," an analysis on the company's site said. "The stock is currently trading almost at the floor price. There is a huge potential for gains."
That potential rests on the belief that the company's "fundamentals are strong," the article continued, citing the fact that Frontier is expanding its market and adding new broadband customers.
"Revenues will also be improved by the sale of AT&T (NYSE: T) products, which complement the existing portfolio of the company," the report continued.
Of course Frontier, like most mid-sized carriers, is facing technology challenges that could leaven some enthusiasm. Aging technology, the report continued, "needs to be replaced on a continuous basis" but "all other signs point to a healthy profit at current prices."
Image source: YChart and Seeking Alpha
One of those encouraging signs is that Frontier expects to receive $71.9 million under the FCC's Connect America Fund (CAF) initiative to expand its broadband network.
"Frontier expects to add 92,876 new customers this year," the report pointed out. "the company already invested $1.5 billion to make broadband services available to 80 percent of its operating regions (and is) working on increasing data speed to 3 megabits per second (and) plans to increase the current speed to 4 megabits per second by 2015."
Frontier, which "suffered greatly from the recent financial downturn" is a company where the "worst is over" and "the stock is ready to go back to its best," the report concluded.
- see this analysis
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