Why Ubiquiti Networks, Inc. Climbed This Morning

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Ubiquiti Networks, Inc. (NASDAQ: UBNT  ) gained about 2% this morning after Wells Fargo initiated coverage on the networking products company with an outperform rating.

So what: Along with the outperform rating, Wells planted a valuation range on the stock of $47 to $51, representing about 30% worth of upside to yesterday's close. While value investors might be turned off by the stock's sharp rise in 2013, Wells believes there's plenty of room to run given Ubiquiti's differentiated position in the still-rapidly growing space.

Now what: Wells expects Ubiquiti to post top and bottom line growth of more than 20% over the next few years. "Our positive view reflects our belief that Ubiquiti's disruptively priced fixed mobile broadband solutions are likely to see strong growth as users in underserved and underpenetrated markets increasingly demand Internet access," noted Wells. "Several new products appear disruptive and may also present attractive opportunities." With Ubiquiti up more than 200% in 2013 and trading at a 30-plus P/E, however, I'd wait for a wider margin of safety before betting on it. 

More compelling ways to grow
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2764013, ~/Articles/ArticleHandler.aspx, 4/17/2014 3:10:14 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

TREND TRACKER: Get Rich When the Web Goes Dark

It's time to say "goodbye" to your Internet! One bleeding-edge technology is about to put the World Wide Web to bed. And if you act right away, it could make you wildly rich. Experts are calling it the single largest business opportunity in the history of capitalism… The Economist is calling it "transformative"... but you'll probably just call it "how I made my millions." Big money is already on the move. Don't be too late to the party – find out the 1 stock to own when the Web goes dark.