Author Topic: UBNT - Ubiquiti Networks  (Read 39035 times)

jouni1

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UBNT - Ubiquiti Networks
« on: January 02, 2014, 01:57:33 AM »
came across this, and knowing there's quite a bit of tech-interested people here thought i'd post and see what you have to say.

the way i understood they mainly make network equipment, wired and wireless systems, which are supposedly better and 3-4x cheaper than cisco for example.

posted some impressive numbers last Q:
  • Revenues of $129.7 million, up 111% year-over-year and an increase of 28% from the prior quarter, marking the fourth consecutive quarter of sequential double-digit revenue growth.
  • GAAP net income was $40.5 million, up 208% year-over-year and an increase of 41% sequentially.
  • Non-GAAP operating profitability of $47.1 million, up 186% year-over-year and an increase of 37% sequentially.
  • GAAP Diluted EPS of $0.45, up 221% year-over-year and non-GAAP diluted EPS of $0.46.
  • Stock price of $46 at time of writing

they're quite richly valued but if they can keep going at a pace even near to this, it could be a solid investment.

what do you think, is it a truly disruptive company or will they get crushed by the behemoths in a few quarters?

sorry for the low level of analysis but as i said i wanted to see if someone understood more about this than me.
« Last Edit: January 02, 2014, 02:00:17 AM by jouni1 »


SpecOps

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Re: UBNT - Ubiquiti Networks
« Reply #1 on: January 28, 2015, 06:21:20 AM »
Resurrecting this thread as I just bought some shares in UBNT.

I think they are very well placed in this industry and customers speak very highly of the company and its products. Pretty cheaply valued considering growth. Lots of worrys about increased competition in the future but I'm not convinced UBNT will be easily displaced as the market leader. My main concern is more over what management does next, though they have proven competent so far.

I wrote up a full thesis on my blog https://investingsidekick.com/ubiquiti-ubnt-investment-thesis/
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compoundinglife

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Re: UBNT - Ubiquiti Networks
« Reply #2 on: January 28, 2015, 07:49:01 AM »
Apolgies in advance, this is kind of a rambly post. Also a disclaimer, I have not been very active in this space for quite a while so my perspective might be dated.

I used to own a company that built a linux based ruggedized outdoor wireless routers for WISPs. The UBNT product line eventually displaced our product which was a niche low volume product and we switched to reselling UBNT products and eventually winded down because the margins in reselling their gear were not enough to make it worth our while at the volume we were doing.

I met with management and their engineers to work on a couple of large projects we were doing in non-public spectrums. This was back in 2006 before the IPO.

The company was hyper efficient. I was very impressed with how much product they produced with such few people and how quickly they were able to get products to market. It was very clear that they were extremely cost conscious and the employees were very dedicated and the engineers were very sharp. I am no longer in that line of business, so I have not dealt with them since 2008.

As for the products, they were really good and feature rich for the price point. However their niche was really wireless ISPs and WISPs loved the simplicity of their stuff and also the super cheap price point. Is the gear as good as cisco? It is not IMO. I have run into quality issues with their gear and know some larger WISPs that have had a lot of quality issues with some of their gear. Issues that require multiple tower climbs to keep replacing stuff after they have said the issue was fixed a new hardware rev. But really the price point you just deal with it because its the cheapest option out there. Quality issues could have just been growing pains or a problem with a specific SKU. I have had mostly good experiences with their products.

There are also two primary different use cases for wifi gear. The WISP use case is that you have some UBNT gear on the tower and then a UBNT device at someone’s house with an ethernet cable out the other end. So you are mostly doing UBNT to UBNT which they have probably tested very well. It also allows you to use whatever proprietary extensions they have for better performance. If I were building a WISP I would still consider UBNT gear because it is just so cheap and featurefull for what you get. But I would likely only use it for connecting end users and try to stick with something like DragonWave ( http://www.dragonwaveinc.com/ ) for backhaul links or links that just can’t go down. But alot of WISPs out there use UBNT and are very happy with it. They have a great edge in the WISP market.

There is also the enterprise/campus use case. When you buy wifi gear from gear from Cisco or Aruba what you are getting is something that has had all the kinks worked out through experience. Wifi is very tricky because there are so many different client chipsets, drivers, variations on the authentication protocols… and it is really easy to run into issues because not everyone adheres exactly to specs. It has gotten better over the years but if I were to do a production wifi network for end users (non wisp model) I would use cisco or aruba. These companies have done huge rollouts at Microsoft campus, Apple campus etc… They have worked out all the issues with all the different types of client side hardware and drivers our there and they have handled alot of the mobility issues.

For example, I have worked on deploying WiFi that *had* to work for events with over 5K devices in a single conference center, used Cisco. Would not use UBNT for that.

I realize that this probably doesn’t help with regards to buying or selling the stock. I looked at UBNT when it IPOed and threw it in the too hard pile, just really hard for me to get a good sense of what will happen to them.

mvalue

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Re: UBNT - Ubiquiti Networks
« Reply #3 on: January 28, 2015, 08:04:28 AM »
Thanks so much for posting this compoundinglife.

It seemed to me part of the promise and peril of ubnt is selling that same WISP hardware into frontier markets - any thoughts on whether that is how some of those markets might be built out or reasons why they might not?

Obviously not asking for opining on the future, just whether these hardware offerings make sense for bootstrap ISPs around the globe w/less wire infrastructure or whether there are other options that might leapfrog that approach.

SpecOps

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Re: UBNT - Ubiquiti Networks
« Reply #4 on: January 30, 2015, 01:29:07 AM »
Thanks for the info compoundinglife, always very useful to hear from someone very familiar with the industry.
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compoundinglife

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Re: UBNT - Ubiquiti Networks
« Reply #5 on: January 30, 2015, 06:50:40 AM »
Thanks so much for posting this compoundinglife.

It seemed to me part of the promise and peril of ubnt is selling that same WISP hardware into frontier markets - any thoughts on whether that is how some of those markets might be built out or reasons why they might not?

Obviously not asking for opining on the future, just whether these hardware offerings make sense for bootstrap ISPs around the globe w/less wire infrastructure or whether there are other options that might leapfrog that approach.

I think UBNT's products make alot of sense in the frontier market. The price points allow for local entrepenuers or governments to bootstrap a WISP for a low cost and incrementally expand their networks. I have no idea however how big the demand is in the developing world.   

Dustin T

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Re: UBNT - Ubiquiti Networks
« Reply #6 on: March 05, 2015, 12:13:55 PM »
I just opened a position. The price, profit margin, and everything I've read about the CEO convinces me the upside is worth the risks.
"If you're prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so the fifth grader won't get bored." -Peter Lynch

SpecOps

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Re: UBNT - Ubiquiti Networks
« Reply #7 on: April 06, 2015, 06:33:12 AM »
Another look at UBNT by blogger Jnvestor, interesting analysis

http://www.jnvestor.com/ubnt/
« Last Edit: April 06, 2015, 06:35:08 AM by SpecOps »
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Dustin T

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Re: UBNT - Ubiquiti Networks
« Reply #8 on: February 13, 2017, 07:08:04 AM »
UBNT just dropped 16% because it missed earnings by a nickel (.72 vs .77 per share expected). Great buying opportunity, earnings and revenue are up actually by 20% year of over year so I'm guessing it's being punished for not being up 21%.

This company is unloved by wall street for a variety of reasons, it doesn't have a CFO (how dare they) doesn't have a traditional sales force, and the CEO owns over 50%. It's a jockey stock the same way Apple was under Jobs. I'm not claiming this is the next apple, just that it's ran by a brilliant young CEO with an excellent track record.

It's been good to me, if you read up on Robert Pera and his company, I believe it could be good to you too.

http://seekingalpha.com/article/4030431-ubiquiti-primer-survival-land-carnivores-dinosaurs

http://seekingalpha.com/article/4044624-ubiquiti-networks-ubnt-q2-2017-results-earnings-call-transcript
"If you're prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so the fifth grader won't get bored." -Peter Lynch

rkbabang

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Re: UBNT - Ubiquiti Networks
« Reply #9 on: February 13, 2017, 08:31:13 AM »
I've been watching UBNT for a while now.  I love the company's products even for the home.  Last year I was so sick of poor wifi in my house that I finally bit the bullet and got rid of my residential wireless router in my house and setup an Ubiquity wireless system.   I went with a Ubiquity EdgeRouter X to a CISCO SB200-26 switch to two Ubiquity Unifi AC-PRO  access points located each at one end of my house.   While I was running the cat6 for the access points I ended up running a bunch more to wire in all my permanent equipment (TVs, computers, video games consoles, etc).   Before doing this I tried an ASUS router, a Netgear router, and a even both together setting one as an extension.  They were unreliable (they kept crashing and needing to be re-booted every week or so), there were dead spots all over my house, I couldn't connect in my yard at all.  After installing the Ubiquity equipment I have wifi everywhere in my house, garage, driveway, yard, and even down the street a little.  They are solid, after setting it up about a year ago and getting it working they never go down or need to be re-booted, they never drop signals even for a second (that I've noticed anyway).  If anyone hates their home wifi I'd recommend going this route.  I know most homeowners never will, but these are excellent, cheap, easy to setup and maintain systems that even a small business should have no problem affording or using.  From the research I've done most of their competitors charge double or more for a similar setup.

I'm thinking about buying UBNT today.