NEW YORK (TheStreet) -- Shares of Juniper Networks (JNPR) are slightly down in pre-market trade at $21.49 after it was reported that CEO Shaygan Kheradpir stepped down after less than a year on the job, following a board review of his conduct related to a customer negotiation, according to Bloomberg.
The networking-gear maker said Kheradpir, 53, who became CEO in January, was resigning over the customer situation. Board members and Kheradpir have "different perspectives regarding these matters," the Sunnyvale, CA-based company said in a statement yesterday. Juniper didn't identify the customer.
Rami Rahim, 43, an executive VP who has been at Juniper for 17 years, was named CEO to replace Kheradpir.
Juniper has faced several challenges this year, including executive shifts and activist pressure amid slowing revenue growth. Kheradpir replaced Kevin Johnson in January and that same month, Juniper was targeted by activist hedge fund Elliott Management Corp. In February, the company bowed to Elliott's pressure for cost cuts and share buybacks, unveiling plans to return at least $3 billion to shareholders and to reduce $160 million in expenses, Bloomberg reports.
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 several positive factors, 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 solid stock price performance, impressive record of earnings per share growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- JUNIPER NETWORKS INC has improved earnings per share by 21.1% 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 ($1.36 versus $0.86).
- Although JNPR's debt-to-equity ratio of 0.22 is very low, it is currently higher than that of the industry average. To add to this, JNPR has a quick ratio of 1.75, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for JUNIPER NETWORKS INC is rather high; currently it is at 68.22%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, JNPR's net profit margin of 9.20% significantly trails the industry average.
- You can view the full analysis from the report here: JNPR Ratings Report