Juniper Networks Can Deliver More Upside

Juniper Networks (JNPR) has done impressively on the stock market in 2015 as its share has appreciated over 25%. This is despite the fact that Juniper’s financial performance last quarter wasn’t great on a year-over-year basis, though the company did deliver impressive growth on a sequential basis. However, investors seem to be recognizing the fact that Juniper is fast improving its bottom line performance.

Bottom line growth is strong

For instance, last quarter, Juniper’s non-GAAP net income was $208.8 million, or $0.53 per share, up 33% year-over-year and 66% sequentially.
This strong bottom line growth was driven by its cost-optimization initiatives, and allowed the company to return ample cash to shareholders.

In the second quarter of 2015, Juniper bought back $600 million of common shares outstanding and thus successfully executing on its commitment to buyback a net of $1.0 billion of shares from January till June 2015. In addition, the Board of Directors at Juniper has endorsed an additional $500 million share buyback authorization. Hence, Juniper currently has a net of about $675 million of share repurchase authorization still outstanding.

Looking ahead, this growth is expected to continue since the company is aggressively investing in product development.

Product development will lead to further growth

Juniper recently launched Juniper Networks Unite, which is an innovative reference architecture that combines newest networking innovations with simple and secured network infrastructure solutions needed to upgrade and transform branch networks to advanced cloud-enabled service platforms.

The secure, automated and simplified architecture as provided by Juniper Networks Unite to develop and control the cloud-enabled enterprise is further enhanced by several other innovative introductions such as, Junos Fusion Enterprise, improvements to Junos Space Network Director coupled with enhancements to the Juniper Networks EX9200 range of programmable Ethernet switches.

The uniquely developed technologically-advanced networking solutions of Juniper are estimated drive significant customer traction particularly from the enterprise customers and thus enhance the company’s financial position.

In addition, Juniper has a dispersion score of 3.0 which is comparable to the S&P 500 median score of 1.0 and the stock is estimated to have over 20 percent of upside potential primarily driven by the fact that stocks with robust fundamentals are believed to benefit from impressive economic growth that is believed to persist over the next several quarters.

Design wins

British Airways lately selected Juniper Networks to help develop IP/MPLS key backbone and Data Center Fabric to run several of its applications including, baggage tracking, check-in and ticketing.

Juniper has declared a key collaboration with Aerohive Networks® to offer easy, secure cloud-driven wired and wireless solutions to distributed enterprises that include K-12 education, retail and key local and state government customers.

Several key enterprise customers have chosen Juniper to jointly develop and deploy their innovative technology solutions, driving significant top line growth for Juniper and thus benefiting the key stakeholders.


Hence, Juniper Networks is making impressive progress on a number of fronts, which will allow the company to deliver more upside in the long run. This is why I think it will be prudent to remain invested in the stock for long-term gains.
Published on Oct 8, 2015
By Harsh Singh Chauhan

Copyrighted 2020. Content published with author's permission.

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