Analysts Mystified By Juniper Networks CEO Firing

Juniper Networks, Inc. (NYSE: JNPR) decision to abruptly fire its chief executive left analysts scratching their heads and seeking more information Tuesday.

The computer networking company traded down recently more than 5 percent at $20.41 per share.

Deutsche Bank's Brian Modoff said investors "would like to better understand the circumstances" surrounding the action.

Juniper said Monday that Chief Executive Shaygan Kheradpir resigned following a review of both his leadership as well as "his conduct in connection with a particular negotiation with a customer."

Juniper added that said Kheradpir and its board "have different perspectives regarding these matters," and named 17-year company veteran Rami Rahim as Kheradpir's replacement.

Firing Kheradpir only 10 months following his appointment as CEO is "very surprising" and "the real story" of the action is unclear, according to MKM's Michael Genovese, who noted that Kheradpir had been front-and-center at a recent analysts' meeting outlining a detailed corporate strategy.

Moreover, Genovese said Juniper's 2015 estimates are in doubt and he maintained a Hold rating and $20 target.

Modoff also maintained a Hold rating on Juniper, but said Rahim's background in product development could be a plus. "The stock is levered to how quickly they can get new products out the door," Modoff said.

About half its quarterly revenue is derived from routing, which offers little scope for growth given shifting technologies, according to Modoff, who applauds the company's current emphasis on its faster-growing security products business.

Juniper remains under pressure from two activist stakeholders including Barry Rosenstein's Jana Partners and Paul Singer's Elliot Management seeking cost cuts and stock buybacks.