Chris Stix of Morgan Stanley says that Juniper addresses a
40 Billion dollar market by 2003. They recently entered the
edge router market.
Juniper Networks (JNPR-$200-SB) Initiate Coverage with a Strong Buy
Christopher Stix
-JNPR has consistently delivered exceptional performance in the Gigabit
Internet router market. In only 2 years of shipping product, JNPR has
captured 24% of a market expected to grow to $40B by C2003. Since inception,
JNPR has not delivered Q/Q revenue growth of less than 40% in any quarter,
with C2Q00 and C3Q00 coming in at 77% and 78% Q/Q growth, respectively. We
expect strong results to continue as service providers build out backbone
networks to satisfy the huge demand for data services.
-We have modeled 30% Q/Q growth for C4Q00, to $263MM. Our C2001E revenue is
$1.28B, representing a 100% annual increase. Our C2002E and C2003E revenueare $1.98B and $2.80B, representing 54% and 48% annual growth, respectively.
-JNPR initially focused on the core routing market which, is expected to
reach $15.8B by the year C2003. With the introduction of the M20, and the
recent introduction of the M5 and M10 Internet routers, JNPR has solidified
itself in the edge router market, which dramatically increases JNPR's
addressable market - estimated to be $23.7B by C2003. The core and the edge
market combined give JNPR an overall addressable market of an estimated $40B
in C2003.
-We initiate coverage of JNPR with a Strong Buy rating and 12-month price
target of $275. JNPR introduced its first product in Sept 1998. Since that
time, JNPR has introduced 4 new product platforms, a new ASIC (Internet
Processor II), and 7 JUNOS software releases. JNPR has transitioned itself
from a one trick pony in the core router space, to a global company with
product spanning from dedicated access, to edge aggregation, to core
networking. We believe that the best is still ahead for JNPR as it continues
to execute in these rapidly growing markets.
Anindo |
