Buffett Brain · Research note
Score updated 26 Sept 2026 · analysis from 27 Jul 2026
UI· Technology
Ubiquiti
Ubiquiti's high ROIC of 71% is overshadowed by stretched valuations and declining growth rates.
Buffett fit
Strong fit
Owner
90
Durability
60
Management
83
Price
1
Score updated 26 Sept 2026 · analysis from 27 Jul 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Technology stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned Ubiquiti outright, I would focus on maintaining its strong of 71% and managing the growth of its revenue, which has only compounded at 7.91% over the last five years.
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The 10-year test shows some vulnerabilities, as Ubiquiti's EPS has experienced a maximum decline of 37.28% over the last five years.
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Ubiquiti's share count has decreased by 1.01% annually, which reflects a disciplined approach to .
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Ubiquiti's current yield of 1.7% is significantly below the 8-10% threshold that I consider a .
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- The full reasoning behind all four pillars
- The 5-year price target and the return it implies
- What would change the call
- Graham, Lynch and Greenblatt on the same stock
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1 of 71.3% significantly exceeds the sector top-quintile cutoff of 13.4%.
- 2 of 35.8% ranks in the top quintile for the technology sector.
- 3Net margin of 30.4% is also in the top quintile, indicating strong profitability.
- 4 of $627.44M demonstrates solid cash generation capabilities.
Concerns
5- 1 of 39.2 is significantly above the 15-20x range justifiable for exceptional businesses.
- 2 yield of 1.7% is well below the 8-10% threshold for a .
- 3 of 46% is below the sector top-quintile cutoff of 60.9%, suggesting pricing pressure.
- 45-year EPS CAGR of only 4.71% raises concerns about growth sustainability.
Price history
$621+101.2%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Ubiquiti develops networking technology for service providers and enterprises, generating $2.57B in revenue with a 30.4% net margin. The company focuses on high-capacity distributed Internet access and provides various networking solutions. Its products, such as UniFi and airMAX, cater to both enterprise and consumer markets. The unit economics are strong, but the high valuation raises concerns.
What other investors would say
The same company, judged by three other documented playbooks.
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