Juniper Jumps Back to #2 in Network Security Market, $28 Fair Value

by Trefis Team
+15.33%
Upside
21.75
Market
25.08
Trefis
JNPR
Juniper
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According to a recent report by research firm Infonetics, Juniper Networks (NYSE:JNPR) jumped to second spot in the network security market pushing Check Point Software Technologies (NASDAQ:CHKP) to third position. Juniper network security appliance and software revenue increased 22% sequentially compared to the overall market growth of 6.4% in Q3 of 2011. Cisco (NASDAQ:CSCO), however, maintained its lead in the market although its network security appliance and software revenue grew only by 4.5% over the last quarter. The global network security appliance and software market for the quarter was $1.46 billion. [1]

We estimate network security appliance and software make up nearly 13% of our $28.13 Trefis price estimate for Juniper.

See our full analysis on Juniper


Global Network Security Market Expected to Grow

According to TechNavio, the research platform of market intelligence firm Infiniti Research, the Global Network Security market is expected to reach $9.9 billion by 2014. [2] The market growth is likely to be driven by growing virtualization of servers, which is leading to the adoption of new network security solutions. Another factor that contributing to growth is the increasing use of network security solutions among small and medium-sized businesses.

Upside to Juniper if it Holds on to Market Share

We currently forecast Juniper’s network security appliance and software revenue to increase to $925 million by 2014 from an estimated $700 million in 2011. But with the Juniper products doing well in the market, it’s unlikely that Juniper will lose market share going forward.

If Juniper maintains its current share of ~13% in the network security market in the future, it would imply network security revenue of $1.3 billion for Juniper in 2014 (based on a $9.9 billion market) as opposed to our estimate of $925 million. This will result in a 3% to 4% upside to our $28.13 Trefis price estimate for Juniper.

Understand How a Company’s Products Impact its Stock Price at Trefis

Notes:
  1. Juniper jumps back to 2nd in network security market; Cisco gains;market up 6%, infonetics.com []
  2. Global Network Security Market 2010-2014, marketpublishers.com []
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