As we enter the final two years of this technologically powered decade, it is more evident than ever that high-quality wireless connectivity and its accompanying infrastructure solutions are a competitive necessity for profit-minded and service-oriented companies. And, at the risk of sounding overly simplistic, a fast and reliable networking infrastructure can significantly augment a company's productivity by allowing for quick transfers of data and seamless connectivity of company branches worldwide. Perhaps that's why industry giants such as Google (NASDAQ: GOOGL) and ESPN, majority owned by Walt Disney Co. (NYSE: DIS), find it essential that the wireless connectivity and infrastructure provided to them is lightning fast, always functional, and tightly secured. Therein, enter FTE Networks, Inc. (NYSE: OTC:FTNW) - a company dedicated to providing state-of-the-art data-focused infrastructure to the businesses that need it most.
And, if the explosive increase in revenue and growing backlog of projects serves as an indication about the potential and demand for FTNW services, then consider them to be the emerging leader in a small and competitively constrained networking industry.
Innovative Platform Distinguishes FTNW
Founded in 2007, FTE Networks, Inc. is an emerging leader as a provider of innovative network connectivity infrastructure solutions to the IT and telecommunications industries. Reduced to simplest terms, FTNW provides latency reduced, end-to-end solutions that enable their clients to connect with their customers, utilizing cutting-edge technology to allow a fast and reliable connection for digital content. However, from a logistical perspective, the technology used and solutions provided are far from simple, making the field of able competitors to FTNW quite small.
With offices throughout the United States and Europe, FTNW has amassed valuable industry experience while building strong relationships with their customers, and as FTE's name continues to gain recognition, the company has been able to expand their industry presence while improving product performance and streamlining costs. Taking advantage of their niche expertise, FTNW has cultivated strong business relationships with its clients through its unique ability to act as a "one-stop shop" for connectivity solutions, with a mission dedicated to build, manage, and maintain the infrastructure provided.
Additionally, unlike most of their competitors, the FTNW business model is designed to ensure the speedy delivery of a custom-tailored and durable solution to the client, facilitating reduced cost and increasing performance and efficiency standards. Through several accretive acquisitions, FTE Networks is uniquely positioned to provide an all-in-one solution for telecommunications, data and general contracting projects.
FTNW Provides Total Infrastructure Solutions
FTE Networks, Inc. is unique to the sector, taking advantage of their expansive portfolio of services that allow the company to target a significant number of high-value markets. Specifically, the company's expertise centers around providing specialized service in the industries of commercial construction, data center buildout, network infrastructure and fiber installation, developing global smart-buildings, and in-building wireless technology. When combined, these five markets are estimated to offer a staggering $576 billion in potential revenues by 2021 - and by benefitting from the strategic acquisitions made by FTNW, the company is expecting to generate substantial revenue streams from each of these markets.
Broadening their scope of market opportunity, FTNW will take advantage of three company's that now reside under the FTNW umbrella, with each providing a unique and valuable service. First and foremost is FTE Network Services, which offers end-to-end network infrastructure and telecommunications solutions to Tier 1 carriers, Fortune 1000 cable companies, and data-centric government agencies. FTE Network Services provides state-of-the-art fiber optic installation, which allows for best-in-class internet connectivity and speeds, along with the setup of data centers and company-wide wireless integration. The company also offers digital security and surveillance services, taking advantage of a growing demand which is becoming a necessity for businesses to protect the integrity of their IP and general operations. Before the acquisitions that set the combined FTNW into motion, FTE Network Services was already generating approximately $14 million in annual revenues, and this number is consistently increasing as FTE Networks continues to expand the company's breadth of services.
CrossLayer Provides Long-Range Functionality
CrossLayer is a second company under the FTNW umbrella. CrossLayer is a single integrated communications platform, providing business owners with an ultra-fast and reliable network for their building or campus. The company is equipped with the latest in networking technology and works toward a primary goal to eliminate redundancy problems that exist within many of their more antiquated competitor's networks. Whether it's at home or work, most everyone has experienced the frustration of slow connection speeds or spotty service range - but at CrossLayer, providing seamless, latency-reduced connectivity is the number one priority. Knowing that today's top businesses have no time for technical difficulties, CrossLayer has built their platform upon some of the most recent breakthroughs in networking technology, which allow for noticeably faster speeds at a much lower cost - astoundingly offering 1G of service for the same price as a typical 20MB connection.
Along with faster transmission speeds, the company works to ensure that their client's network can get accessed by a multitude of customer devices from virtually anywhere in the building or campus. For those who attend or work on a college campus, for instance, experience shows that a campus-wide Wi-Fi solution can often struggle with reception and bandwidth issues. To address these limitations, CrossLayer's DataGrid Campus Connect engages itself in providing the same secure and high-quality connection to anywhere on campus, facilitating a similar user experience as compared to more traditional hot-spot locations.
In addition to overcoming limitations from traditional connectivity placements, CrossLayer also enjoys the distinction of delivering exceptional service and installation for their clients in industry-leading fashion. Many of the company's competitors can take up to ten weeks to finalize the setup of their network and are often just as slow to respond to service requests. CrossLayer, however, substantially reduces implementation time by working directly with the building owner through the entire process to quickly set up and manage their new network connection. Additionally, through the cooperative relationship, the company can efficiently set up industry-leading network infrastructure and ultimately provide the owner the ability to tailor their network to fit their specific needs.
Business and property owners that depend on an omnipresent network connection have much to gain from CrossLayer's targeted services, and for those that are turning to FTNW to integrate those services will benefit from increased speed, functionality, and long-range connectivity advantages.
Benchmark Builders Provides The Foundation
The most recent addition to the FTE label is Benchmark Builders, Inc. Acquired by FTNW in April 2017, Benchmark Builders is a full-service general contracting company that designs and builds innovative and architecturally striking facilities. The company currently serves Fortune 1000, top-tier clients in the NYC Metro Area.
Expected to become a significant revenue generating asset, Benchmark Builders offers a full suite of services to meet the needs of their client, including construction management, general contracting, and pre-construction services. From corporate interiors to broadcast studios, Benchmark Builders is committed to delivering top quality results through each step of the construction process. The company is also dedicated to fully complying with OSHA safety regulations, which maximizes the safety of workers and contributes to reduced insurance costs for both BenchMark Builders and their clients. As an all-inclusive asset, Benchmark Builders has the resources, experience, and knowledge to ensure a successful construction process. More importantly, Benchmark will provide the opportunity for a fully customized and integrated communications framework that can allow the project owner to save millions of dollars, while at the same time benefitting from a well-designed and efficient data transmission infrastructure.
Setting Up To Crush 2018
With the combined services provided by FTE Network Services, CrossLayer, and Benchmark Builders, Inc., FTE Networks, Inc. is deserving of its reputation as a "one-stop shop" for construction and networking solutions. The company is positioned to maximize profitability through their ability to offer a complete host of networking, construction and maintenance solutions, which also results in a seamless and expedited process for their clients.
Entering the first quarter of 2018, FTNW has strategic plans to take full advantage of their three complementary businesses and is actively working toward obtaining patents to protect their technology and service offerings that differentiate themselves from their competitors. Also, by providing scalable and upgradeable solutions to their clients, the FTNW business model allows for long-term relationships that can generate sustainable growth and increase revenue opportunity.
Additionally, FTE already has the advantage of a strong market presence and reputation in the lucrative New York City market. This enviable position, coupled with the recent investments to expand the sales channels, will likely open numerous profitable opportunities for the company. And, by offering a better, faster, and less expensive service, FTNW is proving that their strategy works.
FTE Networks Looks Way Undervalued
FTE Networks generated roughly $177.9 million in revenues in 2017, and the company's recent acquisitions will undoubtedly increase this number by significantly expanding the reach of services offered by FTNW. The company's share price is sitting at $16.75 as of January 13, 2018, with 5.4 million shares outstanding and a market cap of only $70.5 million. Also important to note, the company has just recently been uplisted to the NYSE, which provides an immediate boost to their credibility and serves up an extensive list of institutional investors to diversify and broaden their shareholder base. These benefits, along with a recent deal with KCSA Strategic Communications for Public and Investor Relations, will leave FTE Networks fully equipped to attract a broader investment audience as they continue to take advantage of growth opportunities. The uplisting may already be proving its worth, likely prompting the share price increase of roughly 30% since the first week in January.
Overall, FTE Networks, Inc. has positioned themselves to take full advantage of a lucrative and expanding market. Through building a diverse portfolio on an already solid foundation, the company can provide total solutions to some of the most common and essential corporate telecom needs. Since inception, FTE has generated over $387 million in total revenues, and their unique and all-encompassing business model should work to keep their Fortune 1000 clients loyal to their services.
Investors should also keep in mind that the company's intent to secure development and process patents on their technology distinguishes FTNW further and will strengthen the company's ability to protect its enviable position and market-leading technology for years to come.
With FTNW trading at only $16.75 a share, and with a price to sales ratio far lower than industry peers, investors would be wise to consider the investment opportunity presented by FTNW. And, after accounting for the expected revenue generated from recent and accretive acquisitions, the record-breaking revenue growth and the lucrative backlog of projects, the case for investor attention and action is made that much greater.
This article was originally featured on CNA Finance.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.