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Juniper (JNPR) Rides on Growth Initiatives: Should You Buy?

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Juniper Networks Inc.JNPR has gained significantly on the back of its ongoing growth initiatives, product innovation, shareholder-friendly moves and impressive quarterly results. Notably, the company amassed a return of 22.4% year-to-date.

Juniper is a leading provider of networking solutions and communication devices. The company is capitalizing on the growing demand for data center virtualization, cloud computing and mobile traffic packet/optical convergence.

The company is offering its new suites of products such as the T4000 core router, QFX data center platform, ACX and PTX packet/optical solution among others. With the growing usage of smartphones and tablets, mobile data traffic has gone up. This has resulted in growing demand for advanced networking architecture, which is leading service providers to spend more on routers and switches.

Moreover, Juniper is expected to benefit from higher spending pattern among carriers to upgrade their networks to support the incremental growth in data traffic. Increased spending from AT&T Inc. T and Verizon Communications Inc. VZ - Juniper's two large customers - are expected to aid its top line, going forward. We believe Juniper's new products will be able to meet escalating needs and thereby find easy acceptance among customers.

Furthermore, Juniper's expansion into the Software Defined Networking (SDN) segment should strengthen its position in the networking space. The company entered the space with the acquisition of SDN start-up Contrail Systems (Dec 2012).

According to IDC, the SDN space is expected to generate $3.7 billion in revenues by 2016. Juniper is optimistic about its SDN products and believes that the technology is increasingly attracting customer attention. The company has expanded its SDN product portfolio with new software and hardware offerings such as Junos Fusion, NorthStar Controller and CSE2000 Carrier Services Engine.

The regular dividends and share repurchases also keep investors interested in the stock. During the first half of 2015, the company paid dividend worth $79.5 million and repurchased $1 billion shares.

The company's performance in the last reported quarter was also encouraging wherein its top and bottom lines surpassed the respective Zacks Consensus Estimate. Moreover, Juniper witnessed strong gross and operating margin expansion in the second quarter of 2015.

Following strong quarterly performance, the stock has witnessed solid upward estimate revisions. Over the last 90 days, the Zacks Consensus Estimate for 2015 improved from $1.33 per share to $1.60. Similarly, the Zacks Consensus Estimate for 2016 improved from $1.55 per share to $1.70 over the same time frame.

Currently, Juniper sports a Zacks Rank #1 (Strong Buy).

Stock to Consider

Another stock worth considering in the wireless equipment industry is Harris Corp. HRS , which carries the same Zacks Rank as Juniper.

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AT&T INC (T): Free Stock Analysis Report

HARRIS CORP (HRS): Free Stock Analysis Report

JUNIPER NETWRKS (JNPR): Free Stock Analysis Report

VERIZON COMM (VZ): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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