Networking major Juniper Networks (JNPR) recently unveiled its new portfolio of switching, security and wireless products, named ‘Simply Connected.’ The new suite of products is designed to simplify the wired network and ensure superior management and security of all mobile devices in the enterprise.
The new suite of products include the new networking portfolio and three new switching products, wireless LAN (WLAN) product innovations, and a comprehensive set of updated Apple (AAPL) iOS and Google (GOOG) Android mobile device security capabilities.
The introduction of the new product portfolio is in line with the company’s growth strategy. The new product line will specifically help Juniper to expand in the enterprise network with smartphones, tablets and other devices. It would also provide IT departments with a unique opportunity to migrate beyond legacy networks designed for wired employee PCs.
IT departments struggle to support wireless devices of choice, as legacy networks are ill suited to meet the demands of new applications ranging from surveillance to video conferencing to cloud collaboration. Juniper’s new products should provide a definite solution to address their problem.
Despite their advantages, we expect the widespread adoption of the newly introduced products to take some time. On the other hand, JNPR needs to accelerate the time-line for smaller/cheaper MicroFabric to drive growth in the mainstream datacenter segment.
Juniper delivered mixed first quarter results, with revenues improving on a year-over-year basis. However, EPS remained below our estimates. The launch of new products and entry into new markets will ensure steady share gains for Juniper. We believe that increased spending by key carriers, such as AT&T Inc. (T) and Verizon Inc. (VZ) as well as the ongoing enterprise share gains, fueled by the EX switch and SRX security platforms, will pave the way for healthy profitability going forward.
Moreover, strategic alliances and new acquisitions are positives for Juniper. However, stiff competition from industry stalwarts, such as Cisco Systems Inc.(CSCO) and Hewlett-Packard Company (HPQ), coupled with Juniper’s European exposure will likely weigh on the stock. We therefore have a Neutral rating on the shares.
The company has a Zacks #4 Rank, implying a short-term Sell rating.
