Ubiquiti Networks (UI) AI Stock Analysis

• Market Cap: $25.84B
• Dividend Yield: 0.56%
• Average Volume (3M): 112.23K
• Price to Earnings (P/E): 47.1
• Beta (1Y): 1.27
• Revenue Growth: 21.43%
• EPS Growth: 56.87%
• Country: US
• Employees: 1,515
• Sector: Technology
• Sector Strength: 90
• Industry: Communication Equipment
• EPS (TTM): 3.00
• Shares Outstanding: 60,491,245
• 10 Day Avg. Volume: 104,395
• 30 Day Avg. Volume: 112,228
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.74
• Enterprise Value/Revenue: 8.19
• Enterprise Value/Gross Profit: 19.42
• Enterprise Value/Ebitda: 25.85
• 1Y Price Target: $343.50
• Price Target Upside: -21.55% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

• Rating: 74 Outperform
• Price Target: $476.00 ▲(8.71%Upside)

Ubiquiti Networks displays strong financial performance with robust revenue growth and cash flow management, contributing significantly to its overall score. The technical analysis indicates a strong upward trend, although the stock could be nearing overbought levels. The high P/E ratio suggests potential overvaluation, which slightly tempers the overall score. The lack of significant corporate events or earnings call details does not impact the score.

Positive Factors

Product Demand

Ubiquiti has experienced momentum in demand in the past few quarters after the Company upgraded its products.

Revenue Growth

New products have been core to Ubiquiti’s success in growing revenue.

Negative Factors

Gross Margin

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

Tariffs Impact

The announcement of tariffs for imports into the USA would have an impact on Ubiquiti’s margins.

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 equipment and software solutions. The company's key revenue streams include the sales of its flagship product lines, such as UniFi, AmpliFi, and EdgeMax, which cater to different market segments ranging from small businesses to large enterprises. Ubiquiti also offers cloud-based network management platforms that provide recurring revenue through subscription models. The company's direct-to-consumer sales strategy, coupled with a robust network of distributors and resellers, enhances its market reach. Additionally, strategic partnerships with technology integrators and service providers help Ubiquiti expand its customer base and drive revenue growth.

Ubiquiti Networks Financial Statement Overview

Summary

Ubiquiti Networks presents a strong financial profile, with impressive growth in revenue and profitability. The balance sheet shows moderate leverage, and cash flows are robust, indicating strong operational cash generation. While the company is on a growth trajectory, careful management of equity and leverage is essential to sustain long-term financial health.

Income Statement

Ubiquiti Networks shows strong revenue growth with a TTM (Trailing-Twelve-Months) revenue of $2.32 billion, a significant increase from the previous year. The company's gross profit margin stands at 42.15% and net profit margin at 23.64%, reflecting robust profitability. EBIT and EBITDA margins are also healthy at 30.71% and 31.11%, respectively, indicating efficient operations. Overall, the income statement suggests strong growth and profitability, though slightly lower than the peak performance in 2021.

Balance Sheet

The balance sheet reveals moderate financial stability with a debt-to-equity ratio of 0.85, indicating manageable leverage. The equity ratio of 33.60% signifies a moderate reliance on equity financing. However, the return on equity (ROE) is high at 125.93%, due to relatively low equity levels, which might indicate potential risk if not managed carefully. Overall, Ubiquiti's balance sheet is stable but warrants attention to equity growth.

Cash Flow

Ubiquiti Networks demonstrates strong cash flow generation, with TTM free cash flow of $737 million, growing significantly from the prior year. The operating cash flow to net income ratio is robust at 1.35, indicating strong cash conversion from profits. The free cash flow to net income ratio of 1.34 further supports efficient cash management. Overall, the cash flow statements reflect healthy cash generation and management.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.93B	1.94B	1.69B	1.90B	1.28B
Gross Profit	739.76M	760.73M	669.81M	912.28M	608.17M
EBITDA	518.25M	560.86M	475.95M	754.69M	485.89M
Net Income	349.96M	407.64M	378.66M	616.58M	380.30M
Balance Sheet
Total Assets	1.15B	1.41B	844.71M	890.99M	737.45M
Cash, Cash Equivalents and Short-Term Investments	126.34M	114.94M	136.65M	250.74M	143.54M
Total Debt	757.29M	1.14B	853.26M	532.30M	678.09M
Total Liabilities	1.06B	1.52B	1.23B	888.29M	1.03B
Stockholders Equity	95.06M	-115.73M	-382.88M	2.70M	-295.46M
Cash Flow
Free Cash Flow	529.54M	-166.36M	356.79M	593.70M	429.67M
Operating Cash Flow	541.52M	-145.43M	370.26M	612.02M	460.28M
Investing Cash Flow	-11.97M	-20.93M	-11.18M	-19.27M	69.58M
Financing Cash Flow	-518.02M	144.96M	-472.27M	-485.95M	-625.40M

Ubiquiti Networks Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 437.87
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UI, the sentiment is Positive. The current price of 437.87 is above the 20-day moving average (MA) of 431.77, above the 50-day MA of 412.02, and above the 200-day MA of 354.59, indicating a bullish trend. The MACD of 8.89 indicates Positive momentum. The RSI at 54.43 is Neutral, neither overbought nor oversold. The STOCH value of 33.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for UI.

Ubiquiti Networks Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CSCO	78 Outperform	$265.76B	27.50	21.36%	2.41%	0.47%	-17.77%
UI	74 Outperform	$25.84B	47.08	237.68%	0.56%	21.43%	56.87%
HPE	73 Outperform	$25.99B	20.47	6.39%	2.62%	11.63%	-24.41%
JNPR	71 Outperform	$13.42B	38.18	7.58%	2.20%	-2.56%	52.05%
ERIC	64 Neutral	$24.41B	14.46	19.63%	0.37%	0.98%	―
Sector *	62 Neutral	$34.80B	6.83	-10.78%	2.06%	6.36%	-8.52%
NOK	57 Neutral	$21.65B	20.79	4.31%	3.53%	-2.39%	157.33%