Ubiquiti Networks (UI) AI Stock Analysis

• Market Cap: $24.49B
• Dividend Yield: 0.59%
• Average Volume (3M): 110.59K
• Price to Earnings (P/E): 44.6
• Beta (1Y): 1.26
• 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: 119,826
• 30 Day Avg. Volume: 110,591
• PEG Ratio: 2.62
• Price to Book (P/B): -91.78
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -63.85
• Enterprise Value/Market Cap: 0.48
• Enterprise Value/Revenue: 1.38
• Enterprise Value/Gross Profit: 11.90
• Enterprise Value/Ebitda: 4.79
• 1Y Price Target: $343.50
• Price Target Upside: -15.16% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

• Rating: 74 Outperform
• Price Target: $476.00 ▲(17.56%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

Earnings potential

The scale of growth Ubiquiti has experienced in recent quarters puts the Company on pace for earnings that the Company has not previously generated.

Product demand

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

Revenue growth

The weaker US Dollar is very likely to help drive revenue growth in the June quarter.

Negative Factors

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.

Tariff 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 Networks, Inc., also known as UI, is a technology company specializing in the development and manufacture of cutting-edge wireless data communication products for enterprises and service providers. The company is known for its innovative networking technology solutions that include high-performance Wi-Fi equipment, routing devices, and network management software. Ubiquiti's products are designed to provide reliable and scalable connectivity to address the growing demand for bandwidth and network infrastructure across various sectors such as education, hospitality, and corporate environments.

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 revenue and profitability growth. While the balance sheet shows moderate leverage, cash flows are robust, indicating strong operational cash generation. 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	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	2.32B	1.93B	1.94B	1.69B	1.90B	1.28B
Gross Profit	978.86M	739.76M	760.73M	669.81M	912.28M	608.17M
EBITDA	735.40M	518.25M	560.86M	462.26M	742.59M	485.89M
Net Income	549.02M	349.96M	407.64M	378.66M	616.58M	380.30M
Balance Sheet
Total Assets	1.30B	1.15B	1.41B	844.71M	890.99M	737.45M
Cash, Cash Equivalents and Short-Term Investments	150.97M	126.34M	114.94M	136.65M	250.74M	143.54M
Total Debt	370.91M	757.29M	1.14B	853.26M	532.30M	678.09M
Total Liabilities	862.15M	1.06B	1.52B	1.23B	888.29M	1.03B
Stockholders Equity	436.11M	95.06M	-115.73M	-382.88M	2.70M	-295.46M
Cash Flow
Free Cash Flow	737.22M	529.54M	-166.36M	356.79M	593.70M	429.67M
Operating Cash Flow	741.07M	541.52M	-145.43M	370.26M	612.02M	460.28M
Investing Cash Flow	-9.28M	-11.97M	-20.93M	-11.18M	-19.27M	69.58M
Financing Cash Flow	-683.31M	-518.02M	144.96M	-472.27M	-485.95M	-625.40M

Ubiquiti Networks Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 404.89
• 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 404.89 is above the 20-day moving average (MA) of 397.72, above the 50-day MA of 395.58, and above the 200-day MA of 337.51, indicating a bullish trend. The MACD of 4.85 indicates Positive momentum. The RSI at 53.31 is Neutral, neither overbought nor oversold. The STOCH value of 30.85 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	$269.08B	27.85	21.36%	2.41%	0.47%	-17.77%
UI	74 Outperform	$24.49B	44.63	237.68%	0.59%	21.43%	56.87%
HPE	69 Neutral	$27.19B	21.41	6.39%	2.51%	11.63%	-24.41%
Sector *	69 Neutral	¥229.01B	14.09	7.50%	2.69%	9.25%	8.21%
NOK	64 Neutral	$26.91B	33.20	5.70%	4.15%	-9.96%	-6.83%
ERIC	64 Neutral	$27.20B	171.43	1.67%	0.33%	-2.08%	―