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Juniper Networks Inc. Stock Hold Recommendation Reiterated (JNPR)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Juniper Networks (NYSE: JNPR) has been reiterated by TheStreet Ratings as a hold with a ratings score of C . The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

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Highlights from the ratings report include:

  • JNPR's revenue growth trails the industry average of 14.5%. Since the same quarter one year prior, revenues slightly increased by 1.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Although JNPR's debt-to-equity ratio of 0.14 is very low, it is currently higher than that of the industry average. To add to this, JNPR has a quick ratio of 2.31, which demonstrates the ability of the company to cover short-term liquidity needs.
  • JUNIPER NETWORKS INC has improved earnings per share by 5.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, JUNIPER NETWORKS INC reported lower earnings of $0.36 versus $0.79 in the prior year. This year, the market expects an improvement in earnings ($1.17 versus $0.36).
  • Net operating cash flow has decreased to $154.83 million or 36.44% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • In its most recent trading session, JNPR has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

Juniper Networks, Inc. designs, develops, and sells products and services that provide network infrastructure for networking requirements of service providers, enterprises, governments, and research and public sector organizations worldwide. Juniper has a market cap of $11 billion and is part of the technology sector and computer hardware industry. The company has a P/E ratio of 25.1, above the S&P 500 P/E ratio of 17.7. Shares are up 8.4% year to date as of the close of trading on Friday.

You can view the full Juniper Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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