Why Juniper Networks Will Stagnate Despite Its Cloud Recovery
During the fourth quarter, Juniper Networks has shown signs of recovery. The network vendor posted results in the high end of guidance thanks to the strength of its cloud and enterprise segments. But despite forecasts of revenue and non-GAAP (adjusted) earnings growth in 2020, the company's operating leverage seems limited, and you should not expect any significant improvement before 2021.
Juniper's fourth-quarter revenue increased to $1.21 billion, up 2.3% year over year. This expected performance marks an important step in the company's recovery after nine consecutive quarters of revenue decline.
The company's challenging cloud business seems to be at an inflection point. Juniper had been struggling with its legacy MX routers (network devices that forward data between networks) that didn't match the expectations of the giant cloud providers such as Amazon.com with Amazon Web Services or Microsoft with Azure. But with its transition to its new PTX routers that offer superior flexibility, programmability, and performance, Juniper seems to have improved its offerings for those cloud providers.
Source Fool.com
