Ubiquiti's Valuation May Need To Cool Down

Caffital Research2K FollowersFollow5ShareSavePlay(8min)CommentsSummaryUbiquiti Inc. could need to shift manufacturing of some routers to the US due to the FCC's recent foreign-made router ban. The change could cause operational hiccups and higher costs.UI's financial momentum stands strong. Current products remain highly competitive, and new launches create further earnings growth potential.UI stock already prices in significant earnings growth. I estimate an 11% base scenario downside to $753.1. bombermoon/iStock via Getty Images Ubiquiti Inc. (UI) has continued to report fantastic earnings growth, enabled by successful product launches. The networking equipment company could face some short-term pressure from the FCC’s recent foreign Wi-Fi router ban, but ultimately, the growth story stillThis article was written byCaffital Research2K FollowersFollowI am an avid investor with a major focus on small cap companies with experience in investing in US, Canadian, and European markets. My investment philosophy to generating great returns on the stock market revolves around identifying mispriced securities by understanding the drivers behind a company's financials, and ultimately, most often revealed by a DCF model valuation. This methodology doesn't limit an investor into rigid traditional value, dividend, or growth investing, but rather accounts for all of a stock's prospects to determine the risk-to-reward.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.