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Technology Stocks : Juniper Networks - JNPR -- Ignore unavailable to you. Want to Upgrade?

To: Wizard who wrote (931)	9/9/1999 1:16:00 PM
From: The Phoenix	Respond to of 3350

Wizard, I don't disagree that JNPR will see growth. I was merely stating that they don't own 100% market share in the "core" router market. You apparently agree since you pointed to the fact that since you mention the M40 taking market share from the 12000. Although I agree that this may indeed happen history has not been kind to companies that compete against CSCO. Finally...and we'll end this discussion... as I mentioned to you once before you should do a bit more investigation into the Cerent product. I think you'll find a box that does a nice job of combining optics and routing..coupled with the 12000 and the Monterrey product the CSCO offering is more complete, more scalable, and available today. I'm not saying that JNPR will not grow revenues just that to expect them to grow to fit their $10B valuation might be a bigger challenge than many people think. BTW: of course JNPR revenues percentage-wise will grow fast than CSCO's. At $12.5B annual run rate it'll be tough for CSCO to grow at 50% whereas at a <$75M run rate JNPR should certainly double - if not do even better. The question will be is it the M40, 12000, Nexabit6400, Foundry, Extreme, etc.. product that has the market share...and where is the market share leadership going...and what competing technologies can de-rail the growth and what are incumbent competitors doing to protect their businesses and their shareholders. OG

To: Wizard who wrote (931)	9/9/1999 1:44:00 PM
From: Bridge Player	Respond to of 3350

<< Sounds like a healthy industry to me and one I want to be long. CSCO JNPR RBAK >> May I suggest that you add MRVC, significantly undervalued relative to the others. BP

To: Wizard who wrote (931)	9/10/1999 2:13:00 PM
From: The Phoenix	Read Replies (1) \| Respond to of 3350

WAKE UP CALL... Just did a little quick research.. This should be of interest and set the record straight. The Muligigabit Router Market for Q199 (according to Dataquest) was $137M. Cisco's market share increased slightly to 90%. Juniper was number 2 with 6.5% - slightly down from Q4'98. From IDC (1998 Market share - Csco 94.9%, JNPR 2.2%) Estimated revenues (again from IDC) for gigabit routers will have a 55% CAGR between now and 2003 as follows: 1999 - $227M 2000 - $464M 2001 - $728M 2002 - $968M 2003 - $1120M Estimated revenues for terrabit routers will have a 149% CAGR (from nothing to something) between now and 2003 as follows: 1999 - $6M 2000 - $28M 2001 - $72M 2002 - $138M 2003 - $236M So, given this data... just one question... how do we get to a $10B valuation??? OK.. so let's say JNPR takes 50% market share (not likely but lets say they do)... the total available revenue between now and 2003 is only $4B. So, at 50% market share that's $2B in total revenue for 4 years and that assumes they build and market a terrabit router (M40 is not). OK OK.. let's now say that JNPR goes after the Enterprise market... and let's say that that market is twice the size and the SP market and that JNPR get's 50% market share (again not likely but let's just say they do). Then JNPR generates $6B in 4 years. A couple of flaws with this analysis. It assumes JNPR has 50% market share in the carriers starting this year... they do not. It assumes that JNPR is competeing in the enterprises - they aren't. It assumes JNPR will get 50% market share starting now... well, they need to start - don't they. JNPR is waaaaaaaay overvalued here. The will have fabulous earnings this quater...and perhaps for the next one or two..but their market is limited. They market for terrabit routers is small, and they willhave difficulty penetrating the enterprise market. Assuming they succeed at all these things they are still overvalued. Comments? OG