Series of Deals for Juniper (JNPR)

There is reason for cheer at Juniper Networks Inc. (JNPR), which reported five back-to-back deal wins in the past two weeks. The networking company announced that Waitsfield and Champlain Valley Telecom (WCVT) selected its routing and switching solutions for an undisclosed amount. Vermont-based privately owned telephone company WCVT intends to deliver high-speed telecom services to its growing customer base. The telephone company has deployed Juniper’s MX Series 3D Universal Edge Routers and EX4200 Ethernet Switches with Virtual Chassis fabric technology.

In other recent developments, Deloitte Belgium, an accounting and consulting major deployed Juniper’s WLC2800 WLAN Controllers and WLA522 wireless LAN access points, while Phonoscope, operator of the largest privately owned fiber optic Metropolitan Area Network in the U.S., has selected Juniper Networks’ routing solutions. Juniper’s wireless solutions will provide the Deloitte Belgium staff with a flexible networking experience.

Last week, OnLive selected Juniper’s network infrastructure for an undisclosed amount, to upgrade its data center infrastructure with Juniper’s routing, switching and security solutions. Juniper’s MX Series 3D Universal Edge Routers was selected by fiber optic network services provider FiberLight LLC. This switch will offer FiberLight customers steady and secure network services, helping them meet new requirements without coughing up huge amounts.

Considering the above deal wins, it can be well deduced that Juniper’s networking architecture, which runs on the Junos operating system are in heavy demand. Junos is a reliable, high-performance network operating system for routing, switching and security. It simplifies networking operations while reducing the cost of ownership.

We remain encouraged by the rapid deployment of Juniper’s networking products and services by organizations and governments. We find the company’s acquisitions a good strategy for enriching its product portfolio.

However, Juniper’s weaker-than-expected results in the second quarter keep us on the sidelines. We believe that competition from large companies, such as Cisco Systems Inc. (CSCO) and Hewlett-Packard Company’s (HPQ) networking businesses could contain gross margins, putting pressure on Juniper to lower its price so as to gain or maintain market share. Moreover, management’s decision to continue investments in research and development will be an added pressure.

Juniper’s exposure in European markets and federal reliance are also issues that contributed to the recent estimate cuts.

Currently, Juniper has a Zacks #4 Rank, implying a short-term Sell recommendation.

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