Despite aggressive federal rate hikes, November jobs data beat consensus estimates. Nonfarm payrolls increased by 263,000, surpassing Dow Jones Economists’ forecasts by 31.5%, while the unemployment rate came in at 3.7%. Consequently, the federal rate hikes are expected to continue for the time being, which might hurt the tech sector further.
However, tech industry experts hope companies will manage through any potential downturn. Ken Englund, EY Americas Technology, Media, and Telecommunications Leader, said, “Tech companies are very agile, and that’s a benefit for them during these times.”
He added, “Even with the potential of an economic downturn, tech leaders are looking at ways to anticipate and mitigate recessionary pressures by using it as a time to reset and shift their strategies toward digital transformation, emerging technologies, and talent retention.”
Furthermore, the global information technology industry is predicted to grow at a CAGR of 8.8% until 2026. Also, investors’ interest in tech stocks is evident from the Technology Select Sector SPDR ETF’s (XLK) 10.6% gains over the past month.
Juniper Networks, Inc. (JNPR)
JNPR designs, develops, and sells network products and services worldwide. It sells its products through direct sales, distributors, value-added resellers, and original equipment manufacturers to end-users in the cloud, service provider, and enterprise markets.
On November 30, 2022, PT IndoInternetTbk (Indonet), an Indonesian digital infrastructure provider, chose JNPR’s Juniper Apstra to assist in the automation, modernization, and facilitation of a pioneer network infrastructure expansion. This could help JNPR strengthen its global presence.
JNPR’s total net revenues came in at $1.41 billion for the third quarter that ended September 30, 2022, up 19% year-over-year. Its net income increased 36.7% year-over-year to $121.5 million. In addition, its EPS increased 37% year-over-year to $0.37.
JNPR’s revenue is expected to increase 12.7% year-over-year to $5.34 billion in 2022. Its EPS is estimated to grow 12.1% year-over-year to $1.95 in 2022. Over the past three months, the stock has lost 17.3% to close the last trading session at $32.86.
JNPR’s overall B rating equates to a Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It has a B grade for Value and Quality. Within the Technology – Communication/Networking industry, it is ranked #4 out of 48 stocks. Click here to see the additional POWR Ratings for Growth, Momentum, Stability, and Sentiment for JNPR.
CTS Corporation (CTS)
CTS is a leading product designer and manufacturer of products that Sense, Connect, and Move. The company makes sensors, actuators, and electronic parts in North America, Europe, and Asia. It also sells engineered products to clients in the aerospace/defense, industrial, medical, and transportation sectors.
On October 26, 2022, Kieran O’Sullivan, CEO, said, “We look forward to continued execution of our strategic priorities to further strengthen our financial profile, positioning CTS for long-term profitable growth.”
CTS’ total net sales came in at $151.11 million for the third quarter that ended September 30, 2022, up 24% year-over-year. Moreover, its net profit came in at $11.80 million, compared to a net loss of $63.90 million in the year-ago period. Its EPS came in at $0.37, compared to a loss per share of $1.97 in the prior-year period.
Street expects CTS’ revenue to increase 15.4% year-over-year to $592.08 million in 2022. Its EPS is estimated to grow 27.5% year-over-year to $2.46 in 2022. It surpassed EPS estimates in all four trailing quarters. Over the past nine months, the stock has lost 20.8% to close the last trading session at $42.98.
CTS has an overall B rating, equating to a Buy in our POWR Ratings system. It has an A grade for Quality and a B for Growth. It is ranked #6 out of 42 stocks in the Technology – Electronics industry.
We’ve also rated CTS for Value, Momentum, Sentiment, and Stability. Get all CTS ratings here.
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JNPR shares were trading at $32.53 per share on Monday afternoon, down $0.33 (-1.00%). Year-to-date, JNPR has declined -6.43%, versus a -14.59% rise in the benchmark S&P 500 index during the same period.
About the Author: RashmiKumari
Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions. More...
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