Ubiquiti Networks (UI) AI Stock Analysis

• Market Cap: $18.77B
• Dividend Yield: 0.77%
• Average Volume (3M): 87.62K
• Price to Earnings (P/E): 42.2
• Beta (1Y): 1.15
• Revenue Growth: 14.59%
• EPS Growth: 19.51%
• Country: US
• Employees: 1,515
• Sector: Technology
• Sector Strength: 44
• Industry: Communication Equipment
• EPS (TTM): 7.35
• Shares Outstanding: 60,490,337
• 10 Day Avg. Volume: 76,359
• 30 Day Avg. Volume: 87,621
• PEG Ratio: 2.16
• Price to Book (P/B): N/A
• Price to Sales (P/S): 8.90
• Price to Cash Flow (P/CF): 31.40
• P/FCF Ratio: 31.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $331.00
• Price Target Upside: 6.68% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

Ubiquiti Networks' overall score is driven primarily by its strong financial performance, including robust revenue growth, high margins, and excellent cash flow management. However, technical indicators show bearish signals, and the valuation suggests the stock may be overvalued relative to peers. The absence of significant recent earnings call data or corporate events limits additional insights into company performance.

Positive Factors

Earnings Performance

Ubiquiti is now on pace to exceed the earnings levels reported in fiscal 2021, which was the prime period of COVID-19 spending.

Revenue Growth

Ubiquiti continued to experience the momentum in enterprise revenue that has been leading the latest charge in total revenue growth.

Negative Factors

Cost Pressures

Higher shipping costs still pressure margins, and the company also called out warehouse-related expenses and excess and obsolete inventory charges.

Gross Margin Pressure

The gross margin estimate has been lowered by one hundred basis points in each of the remaining two quarters of the fiscal year.

Ubiquiti Networks Business Overview & Revenue Model

Company Description

Ubiquiti Inc. develops networking technology for service providers, enterprises, and consumers. It develops technology platforms for high-capacity distributed Internet access, unified information technology, and consumer electronics for professional, home, and personal use. Its service provider product platforms offer carrier-class network infrastructure for fixed wireless broadband, wireless backhaul systems, and routing; and enterprise product platforms provide wireless LAN infrastructure, video surveillance products, switching and routing solutions, security gateways, and other WLAN products, as well as consumer products under the Ubiquiti Labs brand name. The company also provides technology platforms, such as airMAX, which include proprietary protocols that contain technologies for minimizing signal noise; EdgeMAX, a software and system routing platform; airFiber, a point-to-point radio system; and UFiber GPON, a plug and play fiber network technology to build high speed fiber internet networks. In addition, it offers UniFi -Enterprise WLAN, an enterprise Wi-Fi system that allows for on-site and remote management through the cloud; UniFi Protect, a video surveillance system, which provides statistical reporting and advanced analytics; UniFi Switch that deliver performance, switching, and power of Ethernet support for enterprise networks; UniFi Console, an enterprise class router and security gateway device; and UniFi Access, a door access system. Further, offers base stations, radios, backhaul equipment, and customer premise equipment; embedded radio products; antennas; and mounting brackets, cables, and power over Ethernet adapters. It serves customers through a network of approximately 100 distributors, online retailers, and direct to customers worldwide. The company was formerly known as Ubiquiti Networks, Inc. and changed its name to Ubiquiti Inc. in August 2019. Ubiquiti Inc. was incorporated in 2003 and is headquartered in New York, New York.

How the Company Makes Money

Ubiquiti Networks generates revenue primarily through the sale of its networking products and solutions. The company's key revenue streams include the sale of hardware products such as wireless access points, routers, and switches. Ubiquiti also earns income from its software solutions, which enhance the functionality and management of its hardware offerings. The company leverages its extensive distribution network and e-commerce platforms to reach a global customer base, which includes small and medium-sized businesses, enterprise customers, and service providers. Additionally, Ubiquiti benefits from economies of scale in manufacturing and a strong focus on research and development to maintain its competitive edge in the market.

Ubiquiti Networks Financial Statement Overview

Summary

Ubiquiti Networks demonstrates robust financial health with strong revenue growth and efficient cost management, reflected in their high margins. The balance sheet has improved significantly with a lower debt-to-equity ratio, though past equity issues pose potential risks. Cash flow performance is particularly strong, showcasing excellent cash generation and management.

Income Statement

Ubiquiti Networks has demonstrated strong financial performance with a robust revenue growth from $1.69 billion in 2022 to $2.15 billion in TTM 2024, indicating a healthy growth trajectory. The gross profit margin stands at 39.84% for TTM 2024, reflecting efficient cost management. EBIT and EBITDA margins are solid at 27.78% and 28.23% respectively, highlighting strong operational efficiency. However, the net profit margin has slightly decreased to 20.68% in TTM 2024 from 21.75% in 2023, suggesting some pressure on net profitability.

Balance Sheet

The balance sheet shows improvement in Ubiquiti's leverage as the debt-to-equity ratio has significantly decreased to 0.20 in TTM 2024 from being negative in prior periods, signaling improved financial health. The equity ratio is 24.53%, indicating a moderate reliance on equity financing. However, the company has had negative stockholders' equity in the past, which poses a risk. The return on equity for TTM 2024 is notably high at 153.16%, reflecting strong profitability relative to equity, but this is also due to a low equity base.

Cash Flow

Ubiquiti Networks exhibits excellent cash flow management with a substantial free cash flow of $776.25 million in TTM 2024, up from $529.54 million in 2023, showing a strong growth rate. The operating cash flow to net income ratio is 1.76, indicating efficient conversion of net income into cash. The free cash flow to net income ratio is an impressive 1.74, highlighting strong cash generation capabilities relative to earnings.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
2.15B	1.93B	1.94B	1.69B	1.90B	1.28B
	Gross Profit
857.09M	739.76M	760.73M	669.81M	912.28M	608.17M
	EBIT
597.61M	499.00M	544.57M	462.26M	742.59M	478.20M
	EBITDA
607.22M	518.25M	560.86M	462.26M	742.59M	485.89M
	Net Income Common Stockholders
444.88M	349.96M	407.64M	378.66M	616.58M	380.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
71.49M	126.34M	114.94M	136.65M	250.74M	143.54M
	Total Assets
116.53M	1.15B	1.41B	844.71M	890.99M	737.45M
	Total Debt
0.00	757.29M	1.14B	853.26M	532.30M	678.09M
	Net Debt
-71.49M	630.94M	1.02B	717.03M	282.88M	535.48M
	Total Liabilities
158.90M	1.06B	1.52B	1.23B	888.29M	1.03B
	Stockholders Equity
-42.37M	95.06M	-115.73M	-382.88M	2.70M	-295.46M
Cash Flow		Free Cash Flow
776.25M	529.54M	-166.36M	356.79M	593.70M	429.67M
	Operating Cash Flow
781.35M	541.52M	-145.43M	370.26M	612.02M	460.28M
	Investing Cash Flow
-9.69M	-11.97M	-20.93M	-11.18M	-19.27M	69.58M
	Financing Cash Flow
-736.18M	-518.02M	144.96M	-472.27M	-485.95M	-625.40M

Ubiquiti Networks Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 310.27
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UI, the sentiment is Negative. The current price of 310.27 is below the 20-day moving average (MA) of 316.82, below the 50-day MA of 352.22, and above the 200-day MA of 267.90, indicating a neutral trend. The MACD of -7.73 indicates Negative momentum. The RSI at 42.17 is Neutral, neither overbought nor oversold. The STOCH value of 12.43 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for UI.

Ubiquiti Networks Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ANET	75 Outperform	$98.29B	35.01	33.14%	―	19.50%	34.64%
CSCO	74 Outperform	$242.12B	26.67	20.02%	2.63%	-5.34%	-30.57%
UI	71 Outperform	$18.77B	42.19	323.87%	0.77%	14.59%	19.51%
HPE	67 Neutral	$20.74B	7.81	12.09%	3.29%	10.93%	43.19%
JNPR	60 Neutral	$12.03B	41.98	6.21%	2.44%	-8.82%	-10.01%
Sector *	58 Neutral	$21.03B	10.58	-16.29%	2.47%	4.38%	-23.63%
EXTR	44 Neutral	$1.85B	―	-152.77%	―	-24.49%	-250.61%