Why Juniper Networks (JNPR) Stock Is Gaining After-Hours Wednesday

NEW YORK (TheStreet) -- Juniper Networks (JNPR) was gaining 1.2% to $25.54 in after-hours trading Wednesday after announcing a settlement of patent litigation with Palo Alto Networks (PANW).

Palo Alto will pay Juniper $75 million in cash and $100 million in stock and warrants to settle a patent infringement case. The dispute relates to IP developed by Palo Alto's founders while working at NetScreen, which Juniper later acquired.

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TheStreet Ratings team rates JUNIPER NETWORKS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate JUNIPER NETWORKS INC (JNPR) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

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

  • The revenue growth came in higher than the industry average of 2.3%. Since the same quarter one year prior, revenues rose by 10.5%. 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 0.21 is very low, it is currently higher than that of the industry average. To add to this, JNPR has a quick ratio of 2.46, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 41.79% over the past year, a rise that has exceeded that of the S&P 500 Index. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • JUNIPER NETWORKS INC has improved earnings per share by 22.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, JUNIPER NETWORKS INC increased its bottom line by earning $0.86 versus $0.36 in the prior year. This year, the market expects an improvement in earnings ($1.62 versus $0.86).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Communications Equipment industry average, but is less than that of the S&P 500. The net income increased by 21.5% when compared to the same quarter one year prior, going from $91.00 million to $110.60 million.
  • You can view the full analysis from the report here: JNPR Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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