Analyst Note| Mark Cash |
No-moat Juniper Networks started fiscal 2021 with its top line exceeding our expectations but within management’s prior guidance range. The company’s revenue grew 7% year over year, and its adjusted earnings clocked in at $0.30 per share. This performance marked another quarter of year-over-year revenue growth for the firm, a streak we expect the firm to continue through 2021. While we forecast Juniper to have a strong 2021--buoyed by a rebound in IT infrastructure demand as companies move to a hybrid cloud model--we think that some of Juniper’s industry peers could grow even faster in the IT infrastructure market. We increase our fair value estimate from $22 to $23 per share to account for the strength expected in 2021 and view shares as marginally overvalued.