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Juniper Networks to Acquire Cybersecurity Specialist Cyphort

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Juniper Networks, Inc. (JNPR - Free Report) recently announced that it intends to acquire Cyphort, a software security company. The deal, which is subject to customary conditions, is expected to be wrapped up in a month.

The acquisition is anticipated to expand the coverage of Juniper’s flagship security solution, Sky Advanced Threat Prevention. It will equip it with features that are in sync with cloud as well as on premises infrastructure.

Cyphort is a provider of threat detection and security analytics. Its products are used by large to mid-size enterprises for enhancing their security metrics. With the addition of Cyphort’s product portfolio, Juniper expects its software and networking security product suite to become more efficient and add to its customer base and revenues.

Juniper stock has lost 2.9% year to date, outperforming the 5.1% decline of the industry it belongs to.



Juniper’s Cybersecurity Efforts

Notably, Juniper’s Software Defined Secure networks (SDSN) is a prominent name in the industry, more so after the security enhancements made in the second quarter of 2017.  

The company’s recent introduction of Contrail Security that ensures security of applications that are deployed in volume-loaded heterogeneous cloud-based environments is a positive.

We believe that in a scenario where cyber-attacks like WannaCry and Petya caused major Internet outages in a span of a month, demand for cybersecurity solutions will increase manifold. Per MarketsandMarkets, the cybersecurity market is expected to reach $231.94 billion by 2022 from $137.85 billion in 2017, at a CAGR of 11%.

Thus, Juniper’s acquisition of Cyphort comes at an opportune time. However, increasing competition from Cisco (CSCO - Free Report) post its acquisition of cyber-security solutions provider Sourcefire is a major headwind for Juniper.

Nevertheless, Juniper’s enhanced security portfolio, the accelerated adoption of its cloud-based products (particularly in data center), growing demand for its switching product (the QFX line) and the recently unveiled Cloud-Grade networking that includes telemetry, automation and machine learning abilities, are anticipated to boost its top line in the near term.

Zacks Rank and Key Picks

Juniper Networks currently has a Zacks Rank #2 (Buy).

Better-ranked stocks in the broader tech space are Applied Optoelectronics, Inc. (AAOI - Free Report) and Applied Materials, Inc. (AMAT - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank Stocks here.

The long-term earnings growth for Applied Optoelectronics and Applied Materials is projected to be 17.5% and 17.1% respectively.

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