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Barron's says Juniper, whose stock has jumped 95% YTD, may be ripe for a sell. This year's gains are due to sharp upturns in the firm's market share, rising operating margins, and its impressive suite of enterprise products. But at a current $36, shares trade at 33x 2008e earnings, vs. 20x for major rival Cisco and 21x for other similar companies. Bulls hope the earnings numbers will give the stock yet another boost, after shares jumped last quarter on a strong beat. But Morgan Stanley analyst Scott Coleman says the Street's "universally bullish" expectations could be setting investors up for a disappointment. Recent margin gains are likely to be short lived, as the firm will ultimately have to sink more money into R&D and marketing. And the fact that 47% of its sales are domestic mean that a U.S. slowdown has the potential to cut in to Juniper's profits materially. Juniper reports earnings Tuesday.

Sources: Barron's
Commentary: Juniper Networks Q2 2007 Earnings Call TranscriptJuniper: Concerns Over Demand Issues In Japan
Stocks to watch: JNPR. Competitors: CSCO, ALU, NT. ETFs: PXQ, IGN, MTK
Earnings call transcript: Juniper Networks Q2 2007

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Source: Juniper Ripe for a Sell - Barron's