What happened

Shares of Ubiquiti Networks Inc. (UI -0.66%) climbed 22.9% in 2017, according to data from S&P Global Market Intelligence, as the wireless networking company fended off attacks from a noted short-seller and delivered strong quarterly results late in the year.

To be sure -- and keeping in mind the stock had only just soared more than 80% in 2016 -- Ubiquiti Networks had a rough start to last year, plunging over 20% in February. For that, it blamed margin pressures stemming from a badly executed launch of its new consumer-centric AmpliFi product line.

Ubiquiti Networks router on a desk next to keys and a smartphone


So what

Shares traded sideways for the next several months, even as Ubiquiti expanded distribution of AmpliFi products to new retail channels including Best Buy, GameStop, and Sam's Club in the second quarter.

Then in early August Ubiquiti Networks stock began to take off once again, climbing over 20% in the days after its third-quarter results effectively demolished Wall Street's expectations. The report was punctuated by the continued rollout of AmpliFi, strong adoption of Ubiquiti's UniFi network hardware, and double-digit growth in both the Americas and EMEA region.

The party was short-lived. The following month, shares plunged again as short-seller Citron Research published a scathing report on Ubiquiti, criticizing -- among other things -- the company's unusually high margins as a sign that it could be a "total fraud."

"I just put my head down and let the products and numbers speak for themselves," responded Ubiquiti CEO Robert Pera. "My apologies to those affected by these clowns."

Now what

Ubiquiti Networks steadily clawed back its gains following the short report, however, helped by another impressive quarter in November that marked the company's ninth straight period of revenue growth.

But Ubiquiti also issued seemingly conservative guidance for the lucrative holiday period, calling for revenue to be roughly flat on a sequential basis. Pera explained that Ubiquiti still has significant room to improve execution in its sales channel and supply chain, adding that there's still a slight "mismatch between our quarter-to-quarter results and the true business demand."

That's fair enough, as Ubiquiti tends to have more kinks to work out given its low-overhead model. For that reason, the company told investors it will no longer provide quarterly financial guidance, but rather take a longer-term focus by providing and updating its annual outlook for each fiscal year.

It should be interesting, then, to see how Ubiquiti Networks fared when it next releases quarterly results next month. In the meantime, I think investors have every right to celebrate its recent rise.