UI

We rate Ubiquiti Inc. (UI) as a Hold with a composite score of 63.5/100 at a current price of $761.84. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in quality (83th percentile) and momentum (74th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (24th percentile) and stability (47th percentile) tempers our overall conviction. We assign a Narrow Moat rating (63/100), Medium uncertainty, and Exemplary capital allocation.

Key items to watch: sustainability of the current growth rate. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

Ubiquiti Inc. holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 63.5/100 places it at rank #386 in our full 7,333-stock universe. With a $40.0B market capitalization, Ubiquiti Inc. operates at meaningful scale within the Manufacturing sector, providing competitive advantages in distribution, procurement, and customer reach.

The near-term outlook is constructive, with revenue growing at 48% and momentum in the 74th percentile confirming positive market sentiment and institutional accumulation. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy. Investment factor at the 24th percentile indicates reinvestment patterns that investors should monitor for sustainability.

The margin cascade tells an important story: gross margins of 44% (+1.9pp vs sector) narrow to operating margins of 34% (+32.6pp vs sector) and net margins of 26.7%, yielding a gross-to-net conversion rate of 60%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $761.84, Ubiquiti Inc. is trading near fair value based on current fundamentals. Our value factor score of 59/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 59.9x (a 169% premium to the sector median of 22.3x), EV/EBITDA of 47.3x (at a premium), P/B of 44.7x, P/S of 16.1x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis partially supports given strong quality metrics.

We assign a Medium uncertainty rating to Ubiquiti Inc.. The stock presents a balanced risk profile: elevated market sensitivity (beta of 1.46) and elevated valuation multiple (P/E 59.9x) that leaves limited margin for error. While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.

Specific risk factors that inform our assessment include: elevated market sensitivity (beta of 1.46); elevated valuation multiple (P/E 59.9x) that leaves limited margin for error. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 47th percentile and quality factor at the 83th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 44% provide a buffer against cost pressures; conservative leverage (5% D/E) limits balance sheet risk. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate Ubiquiti Inc.'s capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 74.7%, disciplined leverage (5% D/E), best-in-class net margins of 26.7%. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — Ubiquiti Inc. meets this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. The company returns capital via a 0.39% dividend yield, and the combination of 47.2% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, Ubiquiti Inc. receives a Hold rating with a composite score of 63.5/100 (rank #386 of 7,333). Our quantitative framework assigns a Narrow Moat (63/100, trend: stable), Medium uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 57/100.

Our analysis supports a neutral stance on Ubiquiti Inc.. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.