Why Juniper Networks' Margins Should Remain Pressured
Juniper Networks (NYSE: JNPR) posted second-quarter revenue and non-GAAP (adjusted) earnings per share above the midpoint of management's guidance ranges amid coronavirus-induced challenges, but its operating margin kept declining. And despite tailwinds over the medium term, the network specialist's margins should remain under pressure. Here's why.
Juniper has been struggling over the last several years to adapt its networking portfolio to the emerging cloud computing paradigm. Its revenue growth and gross margin have been declining as it addressed cloud customers that command lower margins compared to service providers (wireline and wireless carriers and cable operators).
In contrast, its rivals Cisco Systems and Arista Networks have shown stronger financial performances with higher revenue growth and operating margins thanks to the strength of their portfolios.
Source Fool.com
