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

To: The Phoenix who wrote (934)	9/11/1999 1:35:00 AM
From: -	Read Replies (1) \| Respond to of 3350

It's a decent analysis based on the CAGR numbers from IDC/Dataquest, but remember their track record at forecasting the size, growth rate, and timing of new markets has been abysmal. Those firms literally pull numbers out of the air, and they are ill-equipped to estimate the size and growth rates where there is a technological shift involved. There is a huge base of evidence from the past 15 years to repeatedly document this, most planners know those analyst-firm numbers are highly suspect and usually turn out to be way off (e.g., like the Gigabit Ethernet numbers have turned out for the past three years - embarrasingly wrong). Also, in your analysis you've neglected the effects of what will happen with JNPR's new capital (from their IPO)... they are likely going to build a huge R&D organization which will drastically alter their product portfolio. It will look like a different company 18 months out. The M40 is just the spearhead product, many other oppportunities could be pursued, for example competing with Cisco into the mid-range multi-protocol router market, ASND/LU with carrier access equipment/multiplexers, optical networking/DWDM plays, etc. Agree, obviously JNPR is grossly overvalued by conventional measures... just like the internet stocks (YHOO, EBAY, AMZN). At least JNPR has a solid business plan, a viable product strategy, great backers and customers... the stock will likely remain drastically over-priced as they grow (althought there may be occasional dips to $120 etc). Think of it this way: if investors had "understood" Cisco when it IPO'd, it would have been priced this way. Now that the potential is clear for what can happen with a runaway high-tech mega-success, when a company shows the potential for that kind of key role, it is priced to reflect it - so the anticipated 'success' is now built in to the stock price, earlier -- like right after the IPO. Makes it really risky to invest in these things, since not many of them realize those expectations, of course! -Steve