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what it is
Ubiquiti sells the gear and software that keep offices, campuses, and internet providers connected.
how it gets paid
Last year Ubiquiti made $2.6B in revenue.
why it's growing
Revenue grew 33.4% last year (annual base $2.6B). Recent quarters show enterprise and service-provider lines both contributing; the earnings callout below matches the ~$814.9M / +35.8% vs. prior year fiscal Q2 story in the news strip.
what just happened
Ubiquiti posted $3.88 in quarterly EPS, beating the $2.80 expectation by 38.6%.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
60/100 earnings predictability — reasonably predictable
60.6x trailing p/e — you're paying up for this one
0.4% dividend yield — cash in your pocket every quarter
45.0% return on capital — every dollar works hard here
xvary composite: 52/100 — below average
What they do
Ubiquiti sells the gear and software that keep offices, campuses, and internet providers connected.
Ubiquiti wins by bundling routers, Wi-Fi, cameras, phones, and access control into one stack sold through 100-plus distributors and its own webstores. Switching costs (changing vendors once your network is installed) → ripping out equipment, retraining staff, and redoing settings → so what: once your system works, leaving is painful. The quiet part: 93.1% insider ownership means Robert Pera is betting his own fortune on the same stock you are.
How they make money
~$2.6B
FY2025 consolidated revenue · +33.4% YoY (company reported)
Enterprise technology
~$2.25B
Service provider technology
~$319M
Segment dollars: Ubiquiti Form 10-K FY2025 (SEC)—FY2026 quarterlies will not match FY annual splits.
The products that matter
core networking hardware
networking technology equipment
~$2.25B FY2025 · majority of consolidated revenue
UniFi-led enterprise hardware/software is the disclosed revenue engine in the 10-K segment note; FY2025 consolidated growth was +33.4% YoY.
core revenue base
software control layer
software platforms
30.0% operating margin
The company does not break out software revenue here, but the 30.0% operating margin tells you the software attachment matters to the economics.
margin support
go-to-market reach
global distribution network
100+ distributors
Selling through 100+ distributors, online retailers, and direct channels gives Ubiquiti global reach without disclosing a clean segment split. That's useful scale, even if the reporting is sparse.
distribution leverage
Key numbers
45.0%
return on capital
Return on capital → profit generated from the money used in the business → so what: UI turns every $1 invested in the business into $0.45 of operating profit, versus companies that struggle to hit $0.15.
30.0%
operating margin
Operating margin → the share of sales left after running the business → so what: UI keeps $0.30 from each $1 of revenue before interest and taxes, which is rich for networking hardware.
60.6x
trailing p/e
P/E → price compared with annual profit → so what: you are paying more than $60 for each $1 UI earned over the last year.
$4.0B
fy2027 revenue
Revenue estimate → expected sales two years out → so what: the bull case needs UI to grow from $2.6 billion to $4.0 billion.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 25 / 100
- net profit margin 28.8% — keeps 29 cents of every dollar in revenue
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in UI 3 years ago → it's now worth $26,410.
The index would have given you $13,880.
source: institutional data · total return
What just happened
beat estimates
Ubiquiti posted $3.88 in quarterly EPS, beating the $2.80 expectation by 38.6%.
Revenue was about $814.9M for the quarter (fiscal Q2; year ends June 30), up about 35.8% vs. prior year — aligned to the news item below, not a $1.5B / 90% headline. Gross margin was 45.9%, and net margin was about 29.9% on that print.
~$815M
quarter revenue
$3.88
eps (Q · non-GAAP)
45.9%
gross margin
the number that mattered
The 38.6% EPS beat mattered most because it landed on top of ~36% quarterly revenue growth and a ~30% net margin — the multiple needs that stack to keep working.
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ubiquiti, a provider of networking equipment and solutions, turned in a strong fiscal second quarter 2026 performance. (year ends june 30th.) the company reported revenues of $814.9 million, representing a 35.8% increase over the prior year period.
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this growth was driven by robust demand in both the enterprise technology segment, which generated $729 million (up 40.7% vs. prior year), and the service provider technology segment.
-
non-gaap earnings per share reached $3.88, exceeding our expectation of $2.80.
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what’s more, the company achieved a net margin of 29.9%, demonstrating effective operating leverage and margin expansion.
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shares of ubiquiti have risen about 20% in value since our november review.
sources: Ubiquiti Form 10-K FY2025 (SEC, year ended June 30, 2025) · Q2 FY2026 results (Feb 2026, Nasdaq/Business Wire) for ~$814.9M revenue, ~$729.0M enterprise, non-GAAP EPS $3.88
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What could go wrong
The biggest risk is simple: premium-multiple compression on a networking hardware business. UI has earned investor attention with 33.4% growth and 28.8% net margin, but a stock at 60.6x trailing earnings does not need a disaster to get hit.
med
60.6x trailing earnings leaves almost no cushion
The stock trades at a premium multiple even after a huge run to $712.38. You're paying up for sustained execution, not just a good company.
If the multiple compresses toward the roughly 38.5x implied by fy2027 estimates, the stock can de-rate even if the business stays profitable.
med
The path from $2.6B to $4B is doing heavy lifting
Consensus expects revenue to reach $4B by fy2027. That's roughly 54% above the current revenue base.
If growth cools before that bridge looks believable, the stock stops being a premium growth story and starts looking expensive.
med
The thesis assumes the margin profile stays weirdly strong
A 30.0% operating margin and 28.8% net margin are exceptional for a company selling networking equipment. That's part of the appeal.
If those margins slip, investors lose the main reason to treat UI like something better than ordinary hardware.
med
The business may be steady enough. The stock is not
Price stability is 25/100, and the 52-week range runs from $255 to $715. That's a wide swing for a company this size.
You are not buying a bunker stock here. Even a modest reset in expectations can produce large drawdowns.
The business looks strong, but at 60.6x earnings, your margin for disappointment is thin.
source: institutional data · regulatory filings · risk analysis
Pay attention to
watch item
revenue pacing toward $4B
The stock's long-term setup assumes revenue can climb from $2.6B to $4B by fy2027. That's the number wall street is underwriting.
watch item
whether the 30.0% operating margin holds
Elite margins are the reason this networking name gets treated like a premium compounder. If that slips, the story changes.
watch item
institutional buying after three straight net-buy quarters
181 buyers versus 151 sellers in 3q2025 is constructive. A reversal would remove one support beam under the stock.
watch item
how the stock behaves near the $790 midpoint target
With current price at $712.38, the midpoint only implies about 11% upside. The next few quarters need to do more work than the target does.
Analyst rankings
earnings predictability
60 / 100
in human-speak, analysts think the business is solid but the quarterly print can still surprise you.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 181 buyers vs. 151 sellers in 3q2025. total institutional holdings: 2.8M shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$239
$1046
$712
current price
$790
target midpoint · +11% from current · 3-5yr high: $950 (+35% · 8% ann'l return)
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