Juniper Networks, Inc. (NYSE:JNPR), which is in the communications business, and is based in United States, received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$26.30 at one point, and dropping to the lows of US$22.76. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Juniper Networks’s current trading price of US$23.76 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Juniper Networks’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Juniper Networks
What is Juniper Networks worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 4.1% below my intrinsic value, which means if you buy Juniper Networks today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $24.77, then there’s not much of an upside to gain from mispricing. So, is there another chance to buy low in the future? Given that Juniper Networks’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Juniper Networks?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. Juniper Networks’s earnings over the next few years are expected to increase by 44%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? JNPR’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on JNPR, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Juniper Networks. You can find everything you need to know about Juniper Networks in the latest infographic research report. If you are no longer interested in Juniper Networks, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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