Ubiquiti Networks (UBNT) Surges to All-Time High

NEW YORK (TheStreet) -- Ubiquiti Networks (UBNT) surged to an all-time high of $50.30 on Tuesday on higher-than usual volume.

The stock's volume was nearly 3.5 million shares by 2 p.m., compared to its average volume of 1,065,400 shares. The wireless networking products manufacturer announced earlier this month that its second-quarter revenue rose 85% year over year to $138.5 million. Adjusted earnings per diluted share more than doubled to 48 cents.

Ubiquiti also projected third-quarter revenue between $138 million and $144 million and adjusted EPS of 47 cents to 51 cents, which surpassed analysts' expectations.

TheStreet Ratings team rates UBIQUITI NETWORKS INC as a "hold" with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate UBIQUITI NETWORKS INC (UBNT) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and compelling growth in net income. However, as a counter to these strengths, we find that the stock itself is trading at a premium valuation."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • UBNT's very impressive revenue growth greatly exceeded the industry average of 3.6%. Since the same quarter one year prior, revenues leaped by 84.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 44.49% is the gross profit margin for UBIQUITI NETWORKS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 30.18% is above that of the industry average.
  • Net operating cash flow has slightly increased to $27.62 million or 2.95% when compared to the same quarter last year. Despite an increase in cash flow, UBIQUITI NETWORKS INC's cash flow growth rate is still lower than the industry average growth rate of 19.40%.
  • Powered by its strong earnings growth of 135.00% and other important driving factors, this stock has surged by 195.66% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
  • You can view the full analysis from the report here: UBNT Ratings Report