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Here's Why Juniper (JNPR) is a Healthy Investment Bet Now
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Shares of Juniper Networks, Inc. (JNPR - Free Report) have soared 21.8% over the past six months, driven by an accretive customer base and healthy revenues on the back of a flexible business model. Earnings estimates for the current fiscal year have increased 7.1% since August 2022, while that for the next fiscal has moved up 24.5%, implying robust inherent growth potential. With healthy fundamentals, this Zacks Rank #2 (Buy) networking solutions provider appears to be a solid investment option at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Growth Drivers
Juniper is witnessing strong momentum across its core industry verticals and is confident of its long-term prospects. Our estimates show that revenues from cloud vertical are likely to grow in excess of 17% in first-quarter 2023. Investments in customer solutions and sales organizations have enabled the company to capitalize on the solid demand across end markets.
Juniper is set to capitalize on the growing demand for data center virtualization, cloud computing and mobile traffic packet/optical convergence. The company is offering new suites of products, such as the T4000 core router, QFX data center platform, ACX and PTX packet/optical solution, among others. With the growing use of smartphones and tablets, mobile data traffic has gone up. This has resulted in higher demand for advanced networking architecture, leading service providers to spend more on routers and switches. Juniper is expected to benefit from the higher spending pattern among carriers to upgrade their networks to support incremental growth in data traffic.
The simplified network traffic management from Juniper eradicates the complexity associated with multiple networks and delivers optimal bandwidth utilization. With the latest routing platforms, the company aims to significantly improve the network for more agile service delivery and better security features for enhanced visibility and customer data protection. This is expected to provide a shorter time-to-market for new services while ensuring regulatory compliance and data security.
The company has made significant changes to its go-to-market structure to better align its sales strategies with each of its core customer verticals. Moreover, several new products are in the pipeline, which are expected to further strengthen its competitive position across service provider, cloud and enterprise markets. Juniper believes the 400-gig upgrade cycle, 5G deployment and enterprise multi-cloud initiatives hold huge opportunities over the next several years.
With long-term earnings growth expectations of 7%, this stock appears to be an enticing investment option in the volatile market.
Other Key Picks
Arista Networks, Inc. (ANET - Free Report) , sporting a Zacks Rank #1, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 14.2% and delivered an earnings surprise of 14.2%, on average, in the trailing four quarters.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200- and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
Ubiquiti Inc. (UI - Free Report) , carrying a Zacks Rank #2, offers a comprehensive portfolio of networking products and solutions for service providers and enterprises. Ubiquiti’s excellent global business model, which is flexible and adaptable to evolving changes in markets, helps it to beat challenges and maximize growth.
Ubiquiti boasts a proprietary network communication platform that is well-equipped to meet end-market customer needs. In addition, the company is committed toward reducing its operational costs by using a self-sustaining mechanism for rapid product support and dissemination of information by leveraging the strength of the Ubiquiti Community.
Deutsche Telekom AG (DTEGY - Free Report) , sporting a Zacks Rank #1, is likely to benefit from the accretive post-merger integration of T-Mobile US Inc. and Sprite in the United States, in which it owns about 43% stake. The removal of forced cable TV access in multiple dwelling units in Germany through telecom legislation is likely to help Deutsche Telekom expand its broadband market.
Moreover, an aggressive fiber rollout strategy across the country is expected to augment its domestic market hold. The Zacks Consensus Estimate for current-year earnings for Deutsche Telekom has been revised 21.8% upward over the past year. It has a VGM Score of B and a long-term earnings growth expectation of 15.7%.
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Here's Why Juniper (JNPR) is a Healthy Investment Bet Now
Shares of Juniper Networks, Inc. (JNPR - Free Report) have soared 21.8% over the past six months, driven by an accretive customer base and healthy revenues on the back of a flexible business model. Earnings estimates for the current fiscal year have increased 7.1% since August 2022, while that for the next fiscal has moved up 24.5%, implying robust inherent growth potential. With healthy fundamentals, this Zacks Rank #2 (Buy) networking solutions provider appears to be a solid investment option at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Growth Drivers
Juniper is witnessing strong momentum across its core industry verticals and is confident of its long-term prospects. Our estimates show that revenues from cloud vertical are likely to grow in excess of 17% in first-quarter 2023. Investments in customer solutions and sales organizations have enabled the company to capitalize on the solid demand across end markets.
Juniper is set to capitalize on the growing demand for data center virtualization, cloud computing and mobile traffic packet/optical convergence. The company is offering new suites of products, such as the T4000 core router, QFX data center platform, ACX and PTX packet/optical solution, among others. With the growing use of smartphones and tablets, mobile data traffic has gone up. This has resulted in higher demand for advanced networking architecture, leading service providers to spend more on routers and switches. Juniper is expected to benefit from the higher spending pattern among carriers to upgrade their networks to support incremental growth in data traffic.
The simplified network traffic management from Juniper eradicates the complexity associated with multiple networks and delivers optimal bandwidth utilization. With the latest routing platforms, the company aims to significantly improve the network for more agile service delivery and better security features for enhanced visibility and customer data protection. This is expected to provide a shorter time-to-market for new services while ensuring regulatory compliance and data security.
The company has made significant changes to its go-to-market structure to better align its sales strategies with each of its core customer verticals. Moreover, several new products are in the pipeline, which are expected to further strengthen its competitive position across service provider, cloud and enterprise markets. Juniper believes the 400-gig upgrade cycle, 5G deployment and enterprise multi-cloud initiatives hold huge opportunities over the next several years.
With long-term earnings growth expectations of 7%, this stock appears to be an enticing investment option in the volatile market.
Other Key Picks
Arista Networks, Inc. (ANET - Free Report) , sporting a Zacks Rank #1, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 14.2% and delivered an earnings surprise of 14.2%, on average, in the trailing four quarters.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200- and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
Ubiquiti Inc. (UI - Free Report) , carrying a Zacks Rank #2, offers a comprehensive portfolio of networking products and solutions for service providers and enterprises. Ubiquiti’s excellent global business model, which is flexible and adaptable to evolving changes in markets, helps it to beat challenges and maximize growth.
Ubiquiti boasts a proprietary network communication platform that is well-equipped to meet end-market customer needs. In addition, the company is committed toward reducing its operational costs by using a self-sustaining mechanism for rapid product support and dissemination of information by leveraging the strength of the Ubiquiti Community.
Deutsche Telekom AG (DTEGY - Free Report) , sporting a Zacks Rank #1, is likely to benefit from the accretive post-merger integration of T-Mobile US Inc. and Sprite in the United States, in which it owns about 43% stake. The removal of forced cable TV access in multiple dwelling units in Germany through telecom legislation is likely to help Deutsche Telekom expand its broadband market.
Moreover, an aggressive fiber rollout strategy across the country is expected to augment its domestic market hold. The Zacks Consensus Estimate for current-year earnings for Deutsche Telekom has been revised 21.8% upward over the past year. It has a VGM Score of B and a long-term earnings growth expectation of 15.7%.