Juniper Networks, Inc. (NYSE:JNPR), which is in the communications business, and is based in United States, saw significant share price movement during recent months on the NYSE, rising to highs of $28.38 and falling to the lows of $25.56. 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 $26.32 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.
What’s the opportunity in Juniper Networks?According to my valuation model, Juniper Networks seems to be fairly priced at around 12% below my intrinsic value, which means if you buy Juniper Networks today, you’d be paying a fair price for it. And if you believe that the stock is really worth $30.02, then there’s not much of an upside to gain from mispricing. What’s more, Juniper Networks’s share price may be more stable over time (relative to the market), as indicated by its low beta.
What kind of growth will Juniper Networks generate?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. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Juniper Networks, it is expected to deliver a negative earnings growth of -4.9%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What this means for you:
Are you a shareholder? JNPR seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on JNPR for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on JNPR should the price fluctuate below its true value.
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.
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If you spot an error that warrants correction, please contact the editor at email@example.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. Thank you for reading.