GTT: Little Telecom, Big Growth

Sometimes, it’s better to be the little guy.

GTT Communications , a global enterprise networking service provider with a $5.3 billion enterprise value, is but a fly in the telecom landscape, compared with giants AT&T and Verizon Communications . The rare telecom without a legacy business to defend, it was our most recent Barron’s Pick, a stock selection highlighted every Wednesday morning on

While AT&T (ticker: T) and Verizon (VZ) worry about Netflix (NFLX), regulation, and aging infrastructure, GTT (GTT) is taking market share and finding new ways of connecting customers. Rather than building pricey networks, it’s expanding by making synergy-rich acquisitions at a relatively modest cost.

The Virginia-based outfit’s estimated 2018 revenue of $1.5 billion represents less than 1% of the up to $300 billion global market for enterprise wireline services, according to market research firm Gartner. But that’s up from just $58 million when CEO Richard Calder joined the company in 2007.

KeyBanc Capital Markets analyst Brandon Nispel estimates that hundreds of small firms, each with only a few hundred customers, provide the same services as GTT, but without the same network backbone. That makes many ripe for acquisition.