Juniper Up on WANDL Buy


Shares of Juniper Networks (JNPR) have been showing an uptrend post its acquisition of WANDL, Inc., a provider of software solutions. Juniper announced the acquisition on Dec, 16, for a purchase consideration of $60.0 million. The acquisition is likely to close in Jan 2014.

With this acquisition, Juniper will be in a better position to provide enhanced network performance, increased flexibility of the network infrastructure and reduced cost for companies. The acquisition will help Juniper to improve its customer relationships and also expand market share by providing improved networking solutions and communications devices to its existing and new clients.

WANDL is a provider of advanced software solutions that provide greater visibility into the network layers. It provides network analysis, simulation, optimization and capacity planning for organizations, which helps to increase productivity and operational efficiency. Considering WANDL’s market position and customer clout, the integration should help Juniper Networks expand its customer base.

We note that in October, Juniper had announced a partnership with Thursby Software to offer secure solutions to government employees for accessing government resources via Apple (AAPL) iOS devices. The partnership involved the integration of Juniper’s Junos Pulse Secure Access Service and Thursby's PKard software and card reader hardware.

Juniper exited the third quarter of 2013, with total cash, cash equivalents and investments of $2.85 billion compared with $2.79 billion in the previous quarter. We believe that given a strong cash position Juniper will be in a better position to further strengthen its place in networking solutions through more acquisitions.

Moreover, Juniper’s traction in the Software Defined Networking (:SDN) space is a major positive. Juniper is optimistic about the SDN products and believes that the technology is increasingly attracting customer attention. With gradual demand growth, we believe Juniper is well positioned to generate steady revenues from this area.

However, the pending outcome of the SEC investigation, competition from Alcatel-Lucent, S.A. (ALU) and Cisco Systems, Inc. (CSCO), still-sluggish federal spending, and unfavorable macroeconomic conditions remain near-term headwinds.

Currently, Juniper has a Zacks Rank #3 (Hold).

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