Why Ubiquiti Rallied 67% in 2025

Shares of Wi-Fi equipment company Ubiquiti, Inc. (NYSE: UI) rallied 66.7% in 2025, according to data from S&P Global Market Intelligence.

Ubiquiti is closely held by founder and CEO Robert Pera, who owns a stunning 93% of shares outstanding. As such, information outside of earnings releases is scarce, and the stock is volatile in both directions, due to its low public float.

The stock was volatile to the upside in 2025, as Ubiquiti's business recovered from the post-pandemic hangover, Ubiquiti paid down debt, and growth surprised to the upside.

As a result, management introduced a new share repurchase program and substantially increased the company's dividend.

Ubiquiti accelerates revenue and profits

As a leading provider of ultra-fast Wi-Fi equipment and network management tools, Ubiquiti saw high demand but was struck by parts shortages during the pandemic. In response, Pera decided to load up on some debt in order to purchase more inventory so that wouldn't happen again. However, in 2022, inflation spiked, and interest rates rose at the fastest pace in modern history, depressing demand.

The decision would have been disastrous, but Ubiquiti has a very lean business model and operates at high margins. So even though growth slowed, Ubiquiti was able to stay afloat in 2022 and 2023.

In 2024, the recovery began, and growth accelerated in 2025. The company's fiscal third-quarter report in May and fourth-quarter earnings report in August, in particular, were impressive, with Ubiquiti posting 35% and 50% growth, respectively.

Data source: Ubiquiti, Inc. press releases.

Ubiquiti's stock was actually up by about 150% at one point in 2025 after its fourth-quarter report in August. That's when Ubiquiti reported near-50% growth, management announced a new $500 million share repurchase program, and also raised its quarterly dividend by 33.3%, to $0.80 per share. The announcements indicated a transition away from paying down debt, and back to returning more cash to shareholders.

Although Ubiquiti didn't repurchase any stock in the subsequent quarter, that was probably prudent, as the stock had skyrocketed to a P/E ratio of 60.

Ubiquiti's stock actually had a severe correction following its November report, which showed a quarter-over-quarter decline in revenue. Still, year-over-year growth was an impressive 33.3%, and Ubiquiti's hardware-centric business can be lumpy from quarter to quarter.

Image source: Getty Images.

Could a squeeze be coming?

Ubiquiti's valuation still isn't cheap at 43 times earnings. Still, the fact that management may repurchase stock with the public only owning 7% of the company could set up a squeeze higher, due to a lack of liquidity.

It's also possible, given the low public float, that Pera may make an offer to take the company fully private. The question is at what price Pera might be willing to buy out public shareholders, given that shares currently trade 31% below their 2025 inter-year high.

Billy Duberstein and/or his clients have positions in Ubiquiti. The Motley Fool recommends Ubiquiti. The Motley Fool has a disclosure policy.