What: Shares of networking company Juniper Networks (NYSE:JNPR) soared 22.1% during October, according to S&P Capital IQ data. The gains were driven by an analyst upgrade, rumors that Juniper could be acquired, and a strong third-quarter earnings report.
So what: Back on October 5, an analyst at Stifel upgraded shares of Juniper to "buy," setting a $32 price target on the stock. Stifel cited strong traction with large-data-center owners, as well as a shrinking dependency on wireless carriers. On the same day, Juniper announced that its software-defined networking solution had been chosen by AT&T for its Integrated Cloud infrastructure.
On October 6, rumors emerged that Juniper was looking for a buyer. Last year, Juniper bowed to pressure from an activist investor, cutting its workforce by 6%, initiating a dividend, and announcing a share-buyback program. There has been no new news related to these rumors.
On October 22, Juniper reported strong results. The company generated quarterly revenue of $1.25 billion, up 10.6% year over year, and slightly higher than analysts were expecting. Non-GAAP net income came in at $0.57 per share, an increase of $0.21 year over year, and $0.04 higher than the average analyst estimate.
Now what: Following a difficult 2014, when revenue slumped, Juniper is once again posting solid growth. The gains in October brought the stock to levels not seen since 2011, when shares of Juniper collapsed as profits shrunk.
A portion of the stock's gains were erased in November, however, when a broad partnership between rival Cisco (NASDAQ:CSCO) and Ericsson was announced. Cisco expects the deal to create a revenue opportunity of $1 billion by 2018 for both companies, and it could have a major effect on the industry. For Juniper, the partnership effectively eliminates Ericsson as a potential acquirer.
Timothy Green owns shares of Cisco Systems. The Motley Fool recommends Cisco Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.