Juniper To Buy Netrounds; Street Says Hold

Juniper Networks announced the acquisition of Netrounds for an undisclosed sum. The deal is expected to close in the fourth quarter.

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Juniper (JNPR), a leader in secure, artificial intelligence-driven networks, said that the purchase will boost its “automated WAN (wide area network) solutions to further simplify operations for service providers and ensure positive end-user experiences.”

Juniper’s chief product officer Manoj Leelanivas said “End-user expectations for a consistently high quality of experience for services delivered over IP [internet protocol] networks in the cloud era are extremely high, and the onset of 5G will only accelerate this.” He added that the Netrounds deal “will fully automate the complexities of testing and actively monitoring those customer service experiences at scale, a crucial step to staying competitive in today’s dynamic market.” (See JNPR stock analysis on TipRanks)

On Sept. 10, Raymond James analyst Simon Leopold maintained a Buy rating on the stock but tweaked his 2020 estimates due to moderate concerns in the near-term. Meanwhile, Leopold pointed to “several favorable drivers for Juniper’s growth including 400G, a router refresh, Mist/WLAN [wireless local area network], and perhaps its silicon photonics.” As a result, the analyst raised his 2021 EPS estimates and lifted his price target to $28 (27.4% upside potential) from $27.

Currently, the Street is sidelined on the stock. The Hold analyst consensus is based on 5 Holds, 4 Buys and 2 Sells. The average price target of $25.05 implies upside potential of about 14% to current levels. Shares have declined about 10.8% year-to-date.