Ubiquiti Networks to Enhance Shareholder Wealth - Analyst Blog

Ubiquiti Networks Inc. UBNT recently announced that its board of directors authorized a $75 million share repurchase program to buy back its common stock. The program is scheduled to start from Jun 2, 2014.

In Aug 2012, the company had entered into a loan agreement, which included a $50.0 million revolving credit facility valid till Aug 7, 2015. This credit facility is likely to cushion the share repurchase program.

Ubiquiti Networks markets and sells high volumes of carrier and enterprise-class communications platforms through a differentiated business model. Its business model is backed by a rapidly growing and highly engaged community of telecom service providers, distributors, value-added resellers, systems integrators and corporate IT professionals, referred to as the Ubiquiti Community. The company classifies its revenues into three product categories: systems, embedded radios and antennas/other.

Recently, Ubiquiti Networks reported strong third-quarter results with growth on both lines. Moreover, this Zacks Rank #2 (Buy) company reported revenue growth across all operating segments.

Further, the company maintains a sound and flexible balance sheet with ample liquidity that enables it to capitalize on potential acquisition opportunities to fuel its top line. Ubiquiti Networks ended the third quarter with cash and cash equivalents of $291.7 million at the quarter end compared with $227.8 million as of Jun 30, 2013, whereas its long-term debt declined 7.0% in the last nine months to $66.1 million.

Other Stocks to Consider

Other stocks in the wireless equipment market worth considering are ShoreTel, Inc. SHOR, Juniper Networks Inc. JNPR and Nokia Corp. NOK. While ShoreTel sports a Zacks Rank #1 (Strong Buy), Juniper Networks and Nokia carry a Zacks Rank #2 (Buy).

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