Ubiquiti Stock To $497?

Ubiquiti (UI) stock has jumped 14% during the past day, and is currently trading at $712.38. Our multi-factor assessment suggests that it may be time to reduce exposure to UI stock. We are primarily concerned current valuation and a price of $497 may not be out of reach. We believe there is not much to fear in UI stock given its overall Strong operating performance and financial condition. But given its Very High valuation, the stock appears Relatively Expensive.

Below is our assessment:

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Let’s get into details of each of the assessed factors but before that, for quick background: With $43 Bil in market cap, Ubiquiti provides networking technology and platforms for high-capacity Internet access, unified IT, and consumer electronics, including proprietary protocols to minimize signal noise.

[1] Valuation Looks Very High

This table highlights how UI is valued vs broader market. For more details see: UI Valuation Ratios

[2] Growth Is Very Strong

• Ubiquiti has seen its top line grow at an average rate of 19.2% over the last 3 years
• Its revenues have grown 38% from $2.2 Bil to $3.0 Bil in the last 12 months
• Also, its quarterly revenues grew 35.8% to $815 Mil in the most recent quarter from $600 Mil a year ago.

This table highlights how UI is growing vs broader market. For more details see: UI Revenue Comparison

[3] Profitability Appears Very Strong

• UI last 12 month operating income was $1.0 Bil representing operating margin of 35.1%
• With cash flow margin of 24.1%, it generated nearly $716 Mil in operating cash flow over this period
• For the same period, UI generated nearly $889 Mil in net income, suggesting net margin of about 29.9%

This table highlights how UI profitability vs broader market. For more details see: UI Operating Income Comparison

[4] Financial Stability Looks Very Strong

• UI Debt was $116 Mil at the end of the most recent quarter, while its current Market Cap is $43 Bil. This implies Debt-to-Equity Ratio of 0.3%
• UI Cash (including cash equivalents) makes up $303 Mil of $1.6 Bil in total Assets. This yields a Cash-to-Assets Ratio of 18.8%

[5] Downturn Resilience Is Weak

UI has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• UI stock fell 72.9% from a high of $389.88 on 26 March 2021 to $105.82 on 9 November 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 14 January 2025
• Since then, the stock increased to a high of $787.18 on 2 November 2025 , and currently trades at $712.38

 
2020 Covid Pandemic

• UI stock fell 40.3% from a high of $190.13 on 2 January 2020 to $113.45 on 12 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 3 August 2020

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read UI Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.