Back to top

Analyst Blog

Networking company Juniper Inc. (JNPR - Analyst Report) recently announced the signing of an agreement to acquire software-based networking startup Contrail Systems for $176 million in cash. 

Contrail Systems primarily develops software to update and configure networking equipment instead of manually adjusting networking hardware. The recent acquisition is expected to help Juniper to stand its ground against stiff competition from rivals like Cisco Systems (CSCO - Analyst Report).  

The to-be-acquired company currently has some test customers and does not have any products lined up for launch before 2013.

Juniper has been making small and strategic acquisitions to boost its portfolio in segments with good growth potential. Earlier, the company acquired web application security solutions provider Mykonos Software for $80.0 million in cash. The acquisition has allowed Juniper to tap the potential in the growing network security market. The network security market is growing constantly across geographical regions, as companies are slowly recognizing the need to protect their network security.

The emergence of network security as a growth proposition in recent times is mainly because of the increasing concerns related to web security, particularly for businesses that are trying to manage a growing number of personal devices at the workplace.

We believe that the recent acquisition will support technological enhancements, add scale and increase business volumes for the company.

We are positive on Juniper’s new product traction, focus on revenue growth, cost reduction initiatives such as, headcount reduction and improved execution related to the supply chain and procurement activities. Despite stiff competition from F5 Networks Inc. (FFIV - Snapshot Report) and Cisco Systems Inc., we believe that Juniper is well-positioned in the networking space and could capitalize on the worldwide spending on information technology.

The company has a Zacks #2 Rank, implying a Buy rating in the short term.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%