UI · Ubiquiti
Conviction · Medium · more likely to lead the S&P 500 over the next three months, by a modest margin
Wrong if: a daily close below $600
Note written ·
How this view changed
- · Rating raised from Low to Medium. Results, 6 November 2026: Q1 FY2027 revenue $1,026.2M (+39.9% y/y) and GAAP gross margin 47.3% exceeded the $937.3M and 45.8% levels set as confirmation.
Price against the kill line
11.6% clear of its kill line on the 13 November 2026 close.
How to read this
The red mark is the price level of the published kill line: a close through it (a weekly close, on a weekly line) would prove the research note wrong on price. The dot is where the stock closed on 13 November 2026; a dot left of the mark has closed through its line.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close below $600.00, on record since 11 November 2026. The shares are up 14.9% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close below $600, under the 28 October 2026 close of $602.71, which would give back about half of the gain since the $514.20 close of 5 November 2026 before the report. A December-quarter gross margin below 45.8% or revenue below $1,026.2M would confirm the break.
Research onlyNot in the portfolio.
Key figures from the filings · Technology
Quarter to 30 September 2026, filed 6 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 1,026
- Revenue, change on a year (%)
- +39.9
- Gross margin (%)
- 47.3
- Operating margin (%)
- 38.1
- Free cash flow, four quarters ($M)
- 1,028
- Price to earnings (×)
- 37.8
- Free-cash-flow yield (%)
- 2.5
All filed numbers
What Ubiquiti reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 1,026 | +39.9 | 47.3 | 38.1 |
| first filed | 937 | +23.5 | 45.8 | 36.3 |
| first filed | 788 | +18.7 | 47.0 | 36.9 |
| first filed | 815 | +35.8 | 45.9 | 35.9 |
| first filed | 734 | +33.3 | 46.0 | 35.7 |
| first filed | 759 | +49.6 | 45.1 | 34.4 |
| Pre-tax income ($M) | 398 |
| Net income ($M) four quarters: 1,073 | 321 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | 0.0 |
| Operating cash flow ($M) | 1,049 |
| Capital spending ($M) | 20.9 |
| Free cash flow ($M) | 1,028 |
| Cash and short-term investments ($M) | 846 |
| Debt ($M) | Not available |
| Net cash, cash less debt ($M) | Not available |
| Deferred revenue ($M) +50.0% on a year | 105 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 320 |
| Inventory ($M) | 779 |
| Shareholders' equity ($M) | 1,684 |
| Market value ($M) | 40,507 |
| Enterprise value, market value plus net debt ($M) | Not available |
| Enterprise value to sales (×) | Not available |
| Enterprise value to operating income (×) | Not available |
| Price to earnings (×) | 37.8 |
| Price to book value (×) | 24.0 |
| Free-cash-flow yield (%) | 2.5 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 0.6% of shares outstanding sold short, 3.5 days of average trading to cover, −5.1% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $0 | $340K |
The thesis
Ubiquiti's first-quarter fiscal 2027 report showed revenue and gross margin both rising instead of slipping. The shares still sit 36.6% below the 52-week high, and the next test is whether the 47.3% gross margin survives rising component costs that the company itself flagged.
Ubiquiti reported record revenue of $1,026.2 million for the quarter ended 30 September 2026, up 39.9% from $733.8 million a year earlier and 9.5% from the prior quarter (company results, Business Wire, via Morningstar). GAAP (generally accepted accounting principles) gross margin was 47.3%, against 45.8% in the June quarter and 46.0% a year earlier. Benzinga reported adjusted earnings per share of $5.32 against an estimate of $4.57, and sales against an estimate of $977.4 million. Revenue exceeded $937.3 million and gross margin exceeded 45.8%.
The adjusted close was $685.94 on 10 November 2026, up 17.9% over three months, and 36.6% below the adjusted 52-week high of $1,081.30. The 14-day relative strength index (RSI) was 60.9. TIKR reported the shares rose 15% on 6 November 2026. The narrative is accelerating after a clean beat: the report is two sessions old and Barclays moved its target on 9 November 2026. Ubiquiti gives no guidance, so the February report settles whether the margin holds.
Bullish and bearish views on Ubiquiti Inc.
The bull case on Ubiquiti Inc. (UI), in brief: revenue passed $1 billion for the first time. The bear case: component costs are still rising.
Bull case
- Revenue passed $1 billion for the first time. Quarterly revenue was $1,026.2 million on 6 November 2026, up from $937.3 million in the June quarter. Enterprise Technology revenue was $941.3 million against $657.1 million a year earlier (company results).
- Gross margin recovered. The 47.3% GAAP margin is up from 45.8% in the quarter ended 30 June 2026. The company credited lower indirect costs, partly offset by higher component costs.
- Earnings beat estimates. GAAP net income was $320.5 million and GAAP diluted earnings per share were $5.29, against $3.43 a year earlier. Non-GAAP earnings per share of $5.32 beat the $4.57 estimate (Benzinga, 6 November 2026).
- Cash generation backs the payout. Fiscal 2026 free cash flow was $908.94 million against $193.63 million of dividends (stockanalysis.com, 6 September 2026). The $500 million repurchase authorization runs to 30 September 2027 (8-K, 21 August 2026). The company declared a cash dividend alongside the 9 November 2026 results coverage.
Bear case
- Component costs are still rising. The company said component costs have increased since the fiscal fourth quarter and may keep rising while supply stays tight (company results, 6 November 2026). TIKR flagged the risk that this squeezes margins and caps shipments.
- No guidance to anchor the next quarter. Ubiquiti publishes no forecast, so the February report is judged only against sell-side estimates. The 9.5% sequential revenue gain may include channel stocking that is not visible from outside.
- The most bearish analyst still sits below the price. Barclays kept an Underweight rating and raised its target to $537 on 9 November 2026 (company news headline). That is below the $685.94 close of 10 November 2026. The earlier Barclays target was $489 (24 August 2026).
- Valuation has moved with the shares. TIKR put the forward price-to-earnings ratio near 35 times after the jump, against a five-year average of 34 times it cited. Four analysts covered the shares as of 29 September 2026, with targets from $489 to $980 (MarketBeat).
Price setup
The adjusted close was $514.20 on 5 November 2026, before the after-market report, $592.84 on 6 November 2026 and $685.94 on 10 November 2026. The gain came entirely after the report. The shares now trade well above the $530–$570 range that held from May to September.
The latest close is 36.6% below the 52-week high of $1,081.30. The RSI of 60.9 is up from 38.4 on 28 October 2026 and below the 72.0 reading of 2 October 2026.
Crowding evidence is limited to the report reaction and the thin float. Roughly 93% of the shares are held by insiders, so daily ranges are wide in both directions. No insider sale or share issuance is listed in recent filings.
Catalysts ahead
- ~5 February 2027 (est.): Second-quarter fiscal 2027 results (October–December 2026). Shows whether the 47.3% gross margin and $1,026.2M revenue hold as component costs rise; outside the next 30 days.
What would change the view
A daily close below $600, under the 28 October 2026 close of $602.71, which would give back about half of the gain since the $514.20 close of 5 November 2026 before the report. A December-quarter gross margin below 45.8% or revenue below $1,026.2M would confirm the break.
The risks this note tracks, each with what would confirm it:
- Component and shipping costs erode gross margin from the 47.3% reported. Confirmed by: december-quarter GAAP gross margin below 45.8%, or further company language on constrained component supply.
- First-quarter revenue included stocking that does not repeat. Confirmed by: december-quarter revenue below $1,026.2M, with Enterprise Technology revenue below $941.3M.
- The post-report rally fades without new company facts. Confirmed by: a daily close below $600, under the 28 October 2026 close of $602.71.
What it trades with
Ubiquiti trades mainly on its own quarterly results and on component supply, not on a sector group. The Nasdaq 100 had its worst day since 2020 on 5 November 2026 and rebounded on 6 November 2026 (Benzinga), the session Ubiquiti jumped. The shares can therefore move with the market, but the company's results drove that day's gain.
The evidence, claim by claim (8)
- Q1 FY2027 revenue $1,026.2M, up 39.9% from $733.8M a year earlier and 9.5% from the prior quarter; Enterprise Technology $941.3M versus $657.1M; Service Provider Technology $84.9M. Ubiquiti Q1 FY2027 results, Business Wire · as of
- GAAP gross margin 47.3% versus 45.8% in the prior quarter and 46.0% a year earlier; GAAP net income $320.5M; GAAP diluted EPS $5.29. Ubiquiti Q1 FY2027 results, Business Wire · as of
- Adjusted EPS $5.32 versus $4.57 estimate; sales $1.026B versus $977.448M estimate. Benzinga · as of
- Company said component costs have risen since fiscal Q4 2026 and may continue to rise while supply stays constrained. Ubiquiti Q1 FY2027 results, via 247WallSt and TIKR · as of
- Barclays maintained Underweight and raised its price target to $537. Company news headline, Barclays note · as of
- Shares rose 15% on the day after the results. TIKR · as of
- Adjusted close $685.94, 36.6% below the 52-week high of $1,081.30; 14-day RSI 60.9; three-month change 17.9%. Adjusted daily closes · as of
- FY2026 operating cash flow $928.68M, free cash flow $908.94M, dividends paid $193.63M. stockanalysis.com cash-flow statement · as of
Sources