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

To: The Phoenix who wrote (1029)	9/23/1999 2:20:00 PM
From: Wizard	Respond to of 3350

Valuation is very tricky on franchises of the future (JNPR looks like a good telecom franchise alongside Cisco). I saw an interesting study recently which compared the % of market cap achieved of a new leader relative to the existing blue-chip player in that space. Its a dirty analysis but its a clever way to judge relative value. I think a decent comparison is Broadcom to Intel vs. Juniper to Cisco. Intel is obviously a very dominant company and Broadcom is an emerging franchise similar to JNPR/CSCO. JNPR and BRCM are both growing revenues exponentially. BRCM's current market cap is 4.6% of INTC's. It has traded between ~3.5% and ~7.5% of Intels cap since it went public. Juniper's first trade was at $99 or 2.4% of CSCO's market cap and has since run to its current 3.4% of CSCO. Hard to come up with actionable trades based on this but it shows that JNPR's valuation is high but not unprecedented. Maybe at 5% of CSCO's market cap, I will re-evaluate owning JNPR to lock-in gains and buy something else (maybe CSCO) with the money and wait for JNPR to drop 30-50% and get back in. That is all speculative for now because we might get an upside spike post this secondary offering. BTW Gary, with regards to market share, I view JNPR's product as the only one through trials and in production at next-generation networks (ie, UUnet's MPLS Pan-Europeon Network) so I called it 100% market share. I stand by this but I have noted over and over again that it is a silly thing to say because Cisco will get share of the next-generation router market and so as to comply with third-party industry research firms for addressable market analysis, I will stop quoting this number and continue with the total router market.