Global Crossing Global Crossing (GX-NYSE)
By US Bancorp Piper Jaffray ($8.68, July 10, 2001)
Global Crossing has constructed the first worldwide fiber optic network system, connecting four continents and spanning over 100,000 miles. The Global Crossing network serves 27 countries and 200 cities and address over 85% of the world's Internet traffic. The network is characterized by leading-edge technology, global reach and the ability to rapidly deploy new services. Voice, data and bandwidth-intensive next-generation applications like video conferencing and e-commerce are all supported by the Global Crossing network.
Leveraging the network, Global Crossing can target global carriers and enterprises, offering nearly unlimited reach and bandwidth. We believe the company has the unparalleled ability to supply both wholesale and retail customers with services and capacity to meet the explosive growth in demand for global broadband services.
Originally selling wholesale network capacity IRUs (indefeasible rights of use) to help fund its network construction, Global Crossing currently generates over two-thirds of its GAAP (Generally Accepted Accounting Principles) revenue from recurring telecommunications services.
We expect this shift in revenue mix to continue for the foreseeable future, which lends to a more predictable and less lumpy future revenue stream. In addition, the company is positioned to realize improved margins as data services become a greater percentage of total revenue.
We are initiating coverage on Global Crossing with a Buy rating and a 12-month price-target of $20 per share.
-- Cary S. Robinson, CFA
-- Cory N. Jackson, CFA
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