The mean target price of $9.8 implies the required return for this stock is about 10%, around $0.4 EPS in 2005 and long term growth rate of 15%. CAPM sugguests rate of return of 20%.
Upward trend has established and currently the stock is moving away from overbought. This is third time testing $11, its resistant point and $7 is the support point for short term.
I shall consider to buy at a price below $8 if it is not overbought. Hopefully, I can sell it at around $12.
The Company is in the core router market. Currently the TAM is about $2.6 billion and by 2006, it is expected to grow to $ 6 billion. Only segment in the networking market we expect to see growth in this year.
With over $1 billion cash and short term investment should help them to ride out this storm.
Bells or other telecom are not ready to spend capital dollars. Cisco’s end to end solution is more appealing to them than Juniper’s powerful machine.
A few startup companies come out with even better performance router. Hyperchips is one of them.
15 minutes Delayed Quote