Juniper Networks (NYSE:JNPR), Inc. JNPR recently inked an agreement with Allo Technology Sdn. Bhd. to augment the network capabilities in Malaysia for the likely rollout of high-speed fiber network connectivity across the country. The improvement in infrastructure facilities is expected to reduce the complexity of the network while increasing the operational flexibility and efficiency of Allo.
Based in Cyberjaya, Malaysia, Allo operates as an Information and Communication Technology service provider and is a wholly owned subsidiary of Tenaga Nasional Berhad – the largest state-owned electricity utility firm and the largest power company in Southeast Asia. It has played an integral role in deploying fiber optic network in Cyberjaya and has been entrusted with the responsibility of implementing nationwide fiber connectivity by the government. Exponential growth in data demand due to increased work-from-home and extended lockdown restrictions has amplified network pressure, making it imperative for Allo to improve broadband connectivity to cater to the huge demand.
Per the deal, Juniper will modernize Allo’s digital infrastructure by implementing its Networks MX480 Universal Routing Platforms, enabling the carrier to reach underserved areas with low latency, high-quality broadband by increasing its scale of operations. Segment routing simplifies operations and reduces resource requirements in the network by removing network state information from intermediate routers and placing path information into packet headers at the ingress node. This improves operational flexibility and agility for cost-effective user experiences as fewer network elements are involved, avoiding slow response to sudden network changes.
The simplified network traffic management eradicates the complexity associated with multiple networks and delivers optimal bandwidth utilization. With the latest routing platforms, Juniper aims to significantly improve the network for more agile service delivery and better security features for enhanced visibility and customer data protection. This, in turn, is expected to provide shorter time-to-market for new services while ensuring regulatory compliance and data security.
Juniper is set to capitalize on the growing demand for data center virtualization, cloud computing and mobile traffic packet/optical convergence. The company is offering new suites of products, such as the T4000 core router, QFX data center platform, ACX and PTX packet/optical solution, among others. With the growing usage of smartphones and tablets, mobile data traffic has gone up. This has resulted in higher demand for advanced networking architecture, which is leading service providers to spend more on routers and switches. Juniper is expected to benefit from the higher spending pattern among carriers to upgrade their networks for supporting the incremental growth in data traffic.
Despite some short-term challenges, particularly within the cloud and service provider verticals, Juniper expects healthy progress in most areas of its business, which augurs well for its long-term growth. The company has made significant changes to its go-to-market structure to better align its sales strategies with each of its core customer verticals. Moreover, several new products are in the pipeline, which are expected to further strengthen its competitive position across service provider, cloud, and enterprise market.
The stock has gained 26.9% over the past year compared with the industry’s rally of 13.8%.
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Juniper currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry are Clearfield (NASDAQ:CLFD), Inc. CLFD, sporting a Zacks Rank #1 (Strong Buy), and Ubiquiti Inc. UI and Motorola Solutions Inc (NYSE:MSI). MSI, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Clearfield delivered a trailing four-quarter earnings surprise of 49%, on average.
Ubiquiti has a long-term earnings growth expectation of 32.9%. It delivered an earnings surprise of 20.5%, on average, in the trailing four quarters.
Motorola has a long-term earnings growth expectation of 9%. It delivered an earnings surprise of 11.6%, on average, in the trailing four quarters.
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