Zayo Group (ZAYO) Lowered to “Sell” at Zacks Investment Research

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Zacks Investment Research cut shares of Zayo Group (NYSE:ZAYO) from a hold rating to a sell rating in a report published on Thursday.

According to Zacks, “Over the past several years, rising cost of goods sold has remained a major concern for Zayo, which may continue hurting its margins. In addition, the company’s policy of continuous inorganic expansion adds to the integration risks. Further, simmering tensions between the United States and China related to trade restrictions imposed on the sale of communication equipment to the Chinese firms have dented the credibility of the industry and led to loss of businesses. Substantial investments to upgrade infrastructure in the core fiber backhaul network to support anticipated growth in 5G data services could further lead to earnings dilution. Adverse foreign currency translation remains another potent challenge for Zayo. However, improving trends such as record bookings and stable churn are likely to drive net installs and organic growth in the upcoming quarters. The company outperformed the industry on average in the past year.”

A number of other equities analysts have also weighed in on the stock. Bank of America started coverage on shares of Zayo Group in a research report on Friday, May 18th. They set a buy rating and a $43.00 price target on the stock. Deutsche Bank upgraded shares of Zayo Group from a hold rating to a buy rating and boosted their price target for the stock from $37.00 to $42.00 in a research report on Wednesday, April 18th. Finally, ValuEngine upgraded shares of Zayo Group from a hold rating to a buy rating in a research report on Monday, July 2nd. One investment analyst has rated the stock with a sell rating, three have issued a hold rating and fourteen have given a buy rating to the company’s stock. The company currently has an average rating of Buy and an average price target of $42.40.

ZAYO opened at $37.85 on Thursday. The stock has a market cap of $9.37 billion, a P/E ratio of 94.63, a price-to-earnings-growth ratio of 15.59 and a beta of 0.48. Zayo Group has a twelve month low of $32.65 and a twelve month high of $39.66. The company has a current ratio of 1.11, a quick ratio of 1.11 and a debt-to-equity ratio of 3.77.

In other Zayo Group news, Director Linda Rottenberg sold 5,000 shares of Zayo Group stock in a transaction dated Wednesday, June 6th. The shares were sold at an average price of $35.60, for a total transaction of $178,000.00. Following the transaction, the director now directly owns 25,417 shares of the company’s stock, valued at $904,845.20. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, CFO Matt Steinfort sold 1,486 shares of Zayo Group stock in a transaction dated Monday, July 9th. The stock was sold at an average price of $38.50, for a total transaction of $57,211.00. Following the transaction, the chief financial officer now directly owns 10,409 shares in the company, valued at $400,746.50. The disclosure for this sale can be found here. Insiders have sold 302,521 shares of company stock worth $11,375,143 over the last ninety days. 5.20% of the stock is owned by insiders.

Several institutional investors have recently added to or reduced their stakes in the company. Senator Investment Group LP raised its stake in shares of Zayo Group by 11.3% in the 2nd quarter. Senator Investment Group LP now owns 10,000,000 shares of the technology company’s stock valued at $364,800,000 after acquiring an additional 1,015,000 shares during the period. California Public Employees Retirement System raised its stake in shares of Zayo Group by 29.0% in the 2nd quarter. California Public Employees Retirement System now owns 500,417 shares of the technology company’s stock valued at $18,255,000 after acquiring an additional 112,451 shares during the period. Worldquant Millennium Quantitative Strategies LLC purchased a new stake in shares of Zayo Group in the 2nd quarter valued at approximately $803,000. Metropolitan Life Insurance Co. NY raised its stake in shares of Zayo Group by 12.7% in the 2nd quarter. Metropolitan Life Insurance Co. NY now owns 15,662 shares of the technology company’s stock valued at $571,000 after acquiring an additional 1,767 shares during the period. Finally, Marshall Wace LLP purchased a new stake in shares of Zayo Group in the 2nd quarter valued at approximately $9,574,000. 87.50% of the stock is currently owned by institutional investors and hedge funds.

About Zayo Group

Zayo Group Holdings, Inc, through its subsidiaries, provides bandwidth infrastructure solutions for the communications industry in the United States, Canada, and Europe. The company operates in six segments: Fiber Solutions, Transport, Enterprise Networks, Zayo Colocation (zColo), Allstream, and Other.

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