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From The Survey: Synchronoss Technologies
Synchronoss Technologies Inc. (SNCR) is a leading provider of transaction management solutions primarily to the communications services market. The company was incorporated in Delaware in 2000. It completed an initial public offering on June 15, 2006, and began trading on the NASDAQ. Since then, with the exception of a pullback during the most recent recession, Synchronoss has enjoyed steady top- and bottom-line gains, and its stock price has climbed nicely.
The company generates revenues through the sale of technology solutions to customers, including telecom giant AT&T Inc. (T – Free AT&T Stock Report). It has gained wide acclaim over the past several years through its activation business, which has largely been Synchronoss’ bread and butter. Now, the company is moving to drive growth through its newer cloud services, for which demand appears strong, given the growing focus on connectivity in the mobile device sector. However, even with a widening range of offerings, Synchronoss officially operates through just one business segment.
Looking ahead, the activation business should remain solid. But, the long-term growth story here will likely be the company’s cloud services. Its personal cloud platform has already been well received in the market, and will likely continue to gain traction. Meanwhile, Synchronoss ought to benefit from the deployment of its newer business cloud platform. In all, we think adoption rates for cloud based solutions among mobile operators will further increase, leading to continued top- and bottom-line growth for Synchronoss.
In terms of customers, AT&T has historically been the company’s largest account in terms of revenue, contributing 46% of the total in 2012. However, Synchronoss has made strides recently in diversifying its customer base, which now includes telecom companies Verizon Communications (VZ – Free Verizon Stock Report) and Vodafone Group ADR (VOD). In fact, Verizon now accounts for more than 10% of total revenues on its own. And, the company will likely continue to grow its non-AT&T business going forward, further shoring up results for the long haul.
From an investment perspective, the stock has been on a strong run since the start of the year, and further near-term price momentum may be somewhat limited. However, given the company’s favorable long-term prospects, this issue may offer considerable upside potential for those looking to hold it for the 3- to 5-year pull. That said, we encourage interested subscribers to review our full-page report on SNCR stock.
At the time of this article’s writing, the author did not have any positions in any of the companies mentioned.