Are Shares of Ubiquiti Attractive After a Volatile Year?
Ubiquiti (NYSE: UI) provides wireless network hardware and software, with a focus on emerging markets. The stock has experienced substantial volatility over the past year. Shares surged almost 40% following its February 2019 earnings report, then plunged 24% after its May earnings announcement, and dropped 18% following August's update.
The stock was up 19% year-to-date going into last week's Q1 fiscal 2020 earnings release, and the well-received numbers launched it to a new all-time high, climbing more than 30% to $176. This stock certainly had a wild ride, but it seems unlikely that an $11 billion company's fundamentals are changing that substantially so rapidly.
Ubiquiti reported 14.3% revenue growth and 23% GAAP earnings-per-share growth, bringing three-year compounding growth rates for the top and bottom lines to 20% and 15%, respectively. The company enjoyed revenue growth across both its service provider and enterprise technology segments, with most of the gains coming in North America, though sales rose in every geographical region. Ubiquiti's stock pays a small 0.68% dividend yield. But the company is also repurchasing shares aggressively, spending nearly $400 million on buybacks in the most recent quarter, which helped deliver higher earnings growth for investors.
Source Fool.com
