Last week's earnings report starts out very promising. GAAP Earnings rose 80% year over year to $0.27 per share, and sales took a 29% leap to $947 million. That's worth a swig of grog, landlubber! Mighty rival Cisco Systems
So that's the numbers. Juniper has grown free cash flows by 36% annually over the past five years, and still remains a smallish fish in a very large pond -- with plenty of growth potential up ahead. The stock trades at just under 19 times trailing earnings, making for a value-laden PEG ratio of less than 0.8. So why isn't everybody and their sister buying Juniper right now?
Although Juniper has a few large telecoms like Deutsche Telekom
It's much easier to impress the market with the kind of big-name contracts Cisco tends to land than with Juniper's ocean of less publicized deals. The management team, including newly appointed CEO Kevin Johnson, also dares to keep a long-term focus, which doesn't please short-term traders. Guidance for the next quarter was mild, though Johnson says that "the long-term growth potential of the high-performance networking market is strong."
Give Juniper a few quarters to follow through on that long-term promise and I think this minimal valuation will take a long sleep in Davy Jones' locker.