Tech stock to watch: Juniper Networks, Inc. (NYSE: JNPR)

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Juniper Networks, Inc. (NYSE: JNPR) stock rose 2.01% on September 23rd, 2019 after Needham upgraded JNPR stock from Hold to Buy with a $29 price target, which is a 22% upside. The analyst Alex Henderson says JNPR “will stabilize its results in CY3Q and will post a return to year on year growth in CY4Q.” As per Henderson, Juniper could benefit from easier comps ahead and from the rebound in cloud spending.

On the other hand, during the second quarter 2019, JNPR’s net revenues were $1,102.5 million, which is a fall of 8% year-over-year, and an increase of 10% sequentially. The stock fell over 0.1% on September 24th, 2019 (As of 10:03 am GMT-4; Source: Google finance). The company posted the Non-GAAP operating margin was 15.8%, which is a decrease from 18.5% in the second quarter of 2018, and an increase from 11.2% in the first quarter of 2019. The company reported the Non-GAAP net income of $139.5 million, which is a decline of 18% year-over-year, and an increase of 50% sequentially, resulting in non-GAAP diluted earnings per share of $0.40.

Moreover, the company’s total cash, cash equivalents, and investments as of June 30, 2019 were $2,875.0 million, compared to $3,530.5 million as of June 30, 2018, and $3,502.7 million as of March 31, 2019. Net cash flows provided by operations for the second quarter of 2019 were $88.8 million, versus $170.3 million in the second quarter of 2018, and $159.4 million in the first quarter of 2019. Days sales outstanding in accounts receivable was 54 days in the second quarter of 2019, versus 52 days in the second quarter of 2018, and 58 days in the first quarter of 2019. Capital expenditures were $27.3 million, and depreciation and amortization expense were $56.4 million during the second quarter of 2019.

The company had declared a quarterly cash dividend of $0.19 per share to be paid on September 25, 2019 to shareholders of record as of the close of business on September 4, 2019.

Additionally, for full-year non-GAAP gross margin is expected to remain under pressure by China tariffs, despite the ongoing mitigation efforts. The increase in tariffs from 10% to 25% is expected to have a 30-50 basis point impact on full-year non-GAAP gross margin. The company continues to expect non-GAAP operating expenses on a full-year basis to be flat to slightly up versus 2018, inclusive of Mist Systems. Due to the increased China tariffs and a higher non-GAAP tax rate, the company expects the full-year non-GAAP earnings per share to be at the low-end of the previously stated range of $1.75 +/- $0.05.

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