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Juniper (JNPR) Buys Apstra to Boost Data Center Operations

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In a concerted effort to redefine the data center operations and boost intent-based networking in the cloud era, Juniper Networks Inc. (JNPR - Free Report) has inked a definitive agreement to acquire California-based software firm Apstra for an undisclosed amount. The acquisition is likely to fortify its leading market position within the networking market and optimize operations in multivendor environments.

Since its inception in 2014, Apstra has carved a niche for itself by offering an integrated solution to automate the architecture and operations of the data center network by leveraging advanced intent-based analytics. This helps to continually validate the network and eliminate complexity, vulnerabilities, and outages, resulting in a secure and resilient network. In addition, Apstra enables public and private cloud builders to significantly reduce operating costs with proactive insights through automated root cause identification and remediation.

With the acquisition of this intent-based networking firm, Juniper aims to augment its capabilities within open programmability by extending Apstra’s closed loop automation and analytics to customers independently of their underlying infrastructure. The transaction is expected to be dilutive to earnings in the first half of 2021 and breakeven for the full year, while being accretive to non-GAAP earnings in 2022.

Moving forward, Juniper is set to capitalize on the growing demand for data center virtualization, cloud computing and mobile traffic packet/optical convergence. The company is offering 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 higher demand for advanced networking architecture, which in turn is leading service providers to spend more on routers and switches. Juniper is expected to benefit from the higher spending pattern among carriers to upgrade their networks for supporting the incremental growth in data traffic.

Despite some short-term challenges, particularly within the cloud and service provider verticals, Juniper expects healthy progress in most areas of its business, which augurs well for its long-term growth. The company has made significant changes to its go-to-market structure to better align its sales strategies with each of its core customer verticals. Moreover, several new products are in the pipeline, which are expected to further strengthen its competitive position across service provider, cloud and enterprise market.

The stock has lost 7.6% over the past year against the industry’s rally of 44.4%.

Juniper currently has a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the industry are Aviat Networks, Inc. (AVNW - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Clearfield, Inc. (CLFD - Free Report) , and Sonim Technologies, Inc. (SONM - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Aviat delivered a positive earnings surprise of 11.8%, on average, in the trailing four quarters.

Clearfield delivered a positive earnings surprise of 44.3%, on average, in the trailing four quarters.

Sonim delivered a positive earnings surprise of 2.2%, on average, in the trailing four quarters.

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