• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Technology

The Glue of This Hyper-Connected World

Synacor provides the magic behind one-stop-shop Web portals, and it's worth putting on your radar.
By JON MARKMAN
Jun 22, 2012 | 11:30 AM EDT
Stocks quotes in this article: SYNC, VZ, WIN, CTL

Next time you sign into your Apple (AAPL) iPad to watch the HBO shows Girls or Game of Thrones, think for a second about what is going on under the surface. The software asks you to first select your cable company, and then you have to type in your user name and password for authentication -- and only then can you watch the show.

It's just an everyday part of life in our hyper-connected world, but that task entails a lot of action behind the scenes. Your information is passing through a number of different channels that each perform a different role in letting the Internet service provider and the iPad know, in an instant, that you are entitled to see the show on command.

One of the key players that ties together this data chain is Synacor (SYNC), which operates integration, authentication and engagement platforms for cable, satellite, telecom and consumer electronics clients to deliver content.

Synacor provides its services to HBO, CNN and many other cable operators and Internet service providers. The company builds and maintains one-stop-shop Web portals from which customers can access bill pay functions, email and voicemail access, Internet security services and online TV listings.

George Chamoun created the company 12 years ago in Buffalo, NY, merging portal infrastructure company MyPersonal with Chek.com, a messaging platform provider. He continues to serve as executive vice president of sales and marketing, while CEO Ronald Frankel handles the reins.

Although Synacor's clients include everyone from Verizon (VZ) and Windstream (WIN) to Toshiba and CenturyLink (CTL), its core focus is small and mid-sized firms that aren't necessarily equipped to handle these services in-house. Synacor already controls a whopping 25% of the niche, and is the biggest supplier to those who utilize a third party, followed by a unit of Yahoo! (YHOO) at 20%.

One of Synacor's newest products, and a key growth driver for the future, is TV Everywhere. As more television content moves to the online space, and as services such as Netflix (NFLX) and Hulu continue to challenge traditional cable TV providers for customers, the old guard has been forcde to adapt. There's a very good chance that, if you visit your cable provider's website, you will find a portal that allows you to view many of the channels to which you have access as part of your monthly cable subscription.

Cable TV operators have negotiated rights to the online distribution of many of the networks they carry, allowing you to view many of your favorite programs directly from its website. That's where Synacor's TV Everywhere comes in:  It creates the Web portal and integrates the software from all the parties that gives your TV operator the ability to allow this access.

Research-investment firm Citigroup Global Markets conservatively estimates the firm's total addressable market at $1 billion in sales, including targeted Internet service providers, newly targeted consumer electronics firms and international firms in the Canada and Western European markets. That presents a tremendous growth opportunity for the firm, considering it finished the year with just over $91 million in total revenue.

Another major growth driver for the firm has been its recent foray into consumer electronics, as it has launched the Web portal for Toshiba's laptops and tablets. Toshiba marks Synacor's first electronics client, but already represents more than 10% of the company's revenue, thus paving the way for explosive growth when Synacor signs other clients in this sector.

The one key area in which the firm had had no presence was the mobile market -- but its recent purchase of HTML5 system provider Carbyn will help rectify that problem. The acquisition gives the company a platform from which to deploy its current offerings on mobile phones and tablets.

Although the company has been around for a decade, it's really just getting its footing and is unquestionably still in an early growth phase. Revenues have risen 50% in the past three years, while net income has risen an incredible 655% during that same time frame.

Synacor (SYNC) -- Daily | Source: StockCharts.com

Shares have risen 161% since the stock went public in February, but there are plenty of opportunities that lie ahead, so keep this one on your radar. Its next quarterly earnings report is due in July.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Markman had no positions in the stocks mentioned.

TAGS: Investing | U.S. Equity | Technology

More from Technology

Don't Be in a Rush to Invest in Cisco

Stephen Guilfoyle
May 19, 2022 11:00 AM EDT

Someone already long this stock, who has taken a hit, doesn't need to liquidate unless...

Alteryx Has Yet to Bottom Based on Its Charts

Bruce Kamich
May 19, 2022 9:04 AM EDT

The technical signs indicate that the stock of the data analytics company still needs to build a base.

Now It's All One Big Macro Trade

Maleeha Bengali
May 19, 2022 9:00 AM EDT

The liquidity that pushed up all risky assets is now the leading factor in taking them down.

After Cisco Reports, Will There Be a Tradable Rally?

Bruce Kamich
May 18, 2022 12:04 PM EDT

Let's see how the charts look before earnings Wednesday night.

What's Up? DOCS Might Be Soon

Bruce Kamich
May 17, 2022 2:45 PM EDT

Shares of medical network platform Doximity are positioned for a rally, according to the charts.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 01:44 PM EDT STEPHEN GUILFOYLE

    Stocks Under $10 Portfolio

    We're making a series of trades here.
  • 03:07 PM EDT PAUL PRICE

    Why Is Walmart Down Big Today?

    Besides its poor earnings report Walmart was way...
  • 07:14 PM EDT PAUL PRICE

    A New, Very Scary Movie

  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login