Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: RR who wrote (3455)	9/24/2000 2:31:32 PM
From: Jill	Read Replies (1) \| Respond to of 65232

For those porchers who love extr but don't know why <g>, you can put it in the context of juniper networks (which by the way was rumored last july to be considering acquiring extr, but maybe the latter is getting too expensive now!) Last quarter jnpr had 77% sequential growth--extr 37%--foundry 26% which caused it to get slammed. The key to these companies is can they actually be the next csco, or take big market share from that zillion pound gorilla? I know this will give Tom a headache, so he doesn't have to read it! Here is excerpt from Sep 21 Jim Jubak article (I don't like him that much but has good cleear points): The market values Juniper at a lofty $66 billion -- and that's for a company with just $113 million in revenue in its June 2000 quarter and pro forma net income of $29 million. Why so dear? It's not Juniper's growth rate -- as tremendous as the company's growth is, the current stock price still discounts 100% annual growth (and a 100 price-to-earnings ratio) well into 2004. And if you assume that the stock will appreciate by 25% a year while earnings are racing to catch up, then the current stock price discounts 100% annual earnings growth into 2006. That's a lot of years at 100%. No, what has created the stock's tremendous price is the incredible strength of the fundamental story -- not the fundamental numbers. More than any other next-generation networker, Juniper actually sounds capable of being the next Cisco Systems (CSCO:Nasdaq - news). And the market capitalization on Cisco, even with the stock's recent troubles, is a rather tidy $436 billion. Exactly what is the Juniper story? It reads like this: New applications and the demand for increased bandwidth require a complete upgrading of the telecommunications network. Juniper's routers are designed to sit at the core of this redesigned network, and -- I think this is the killer "fact" in the story -- the company has been able to take market share from Cisco, head-to-head, in what has long been one the bigger company's core strengths. Juniper has been able to score its wins not just by undercutting Cisco's prices but also by offering increased speed and software-based network configuration. And now, Juniper is taking the advantages that helped it win business in the market for core Internet routers and moving to attack another huge networking market -- the one for routers that sit at the edge of the network. On Sept.19, the company announced that it had ported its network core hardware to new M5 and M10 edge routers. How far can this story drive Juniper? A comparison with JDS Uniphase suggests there may be an important psychological barrier at $100 billion in market capitalization for a technology stock that's running on potential revenue and earnings. Juniper won't run up against any fundamental numbers that might hurt its story until 2001.