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Is Ciena (CIEN) stock still a buy opportunity?

Royston Roche | 3:59 am ET, 16 Dec 2018

Ciena Corporation (CIEN) shares are trading at $34.55, down -1%.  The company announced its quarterly earnings results last Thursday--the stock surged after the company's profit jumped 66% and revenue shot up 21%.  Will Ciena's stock continue to appreciate?  What's CIEN stock price forecast?

Ciena Corp is a network strategy and technology company.  Lately, the stock has performed well: it generated a return of 54% in the past year.  The stock has managed to stay strong during the recent market sell-off.

Investors are showing interest in the company because of its strong earnings growth. On the other hand, a few bearish investors feel that the stock is overvalued now after the strong rally this year.  

Fourth-quarter results were released before market open on December 13, 2018. Analysts expected the company to earn 48 cents per share on revenue of $862.37 million. The company beat analysts’ estimates: its adjusted earnings were 53 cents a share, 5 cents higher than the expectation. Revenue rose 21% to $899.4 million.  

What is the sentiment towards the CIEN stock? Our technical analysis shows that:

  • The stock short-term sentiment (next 30 days) is trending positive;
  • The mid-term sentiment (3-6 months) is positive;
  • The long-term sentiment (9-12 months) is trending positive. 

Over the last month, Ciena Corporation (CIEN) returned -1.78%.

Ciena Corporation (CIEN) forward P/E ratio is 18.02, and it’s high compared to its industry peers’ P/E ratios.

Ciena Corporation (CIEN) short share of float is 7.78%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock.

Ciena Corporation (CIEN) average analyst price target ($34.65) is 10.17% above its current price ($31.45).

For the latest price and information on Ciena Corporation, please visit Finstead and search for "CIEN price" or "CIEN news".

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finstead Bites, please send us an email at hi@finstead.com.


Ciena Corporation (CIEN) Buy or Sell Stock Guide

Updated at: 7:39 am ET, 24 Dec 2018

The analysis below may be helpful to you if you have any of the following questions about CIEN stock:

  • Is CIEN a buy or a sell?
  • Should I sell or hold CIEN stock today?
  • Is CIEN a good buy / a good investment?
  • What are CIEN analyst opinions, recommendations, ratings?

Here are CIEN stock buy reasons/signals:

1. Blue Planet orchestration software has been well received by telecommunication carriers. A successful expansion of its installed base will have a positive effect on gross margins in the near term.

2. Ciena’s planned international sales expansion in Brazil, the Middle East, and India is a welcome development. This, combined with its global partnership with Ericsson, will continue to drive international revenue in the near term.

3. We are encouraged by the revenue growth from web-scale providers and cable MSOs, and we expect this trend to continue.

4. CIEN quarterly revenue growth was 12.40%, higher than the industry and sector average revenue growth (3.27% and 5.17%, respectively).

5. CIEN profitability is improving. The YoY profit margin change was 42.25pp.

6. CIEN forward P/E ratio is 15.92, and it’s low compared to its industry peers’ P/E ratios.

7. CIEN PEG ratio (P/E adjusted for growth) is 1.29, and it’s low compared to its industry peers’ PEG ratios.

8. CIEN average analyst rating is Buy.

Here are CIEN stock sell reasons/signals:

1. New players in the software networking industry use white-box networking hardware, so they aren't burdened by hardware development costs. We expect an increase in margin pressure in the long run.

2. The large communication services providers constitute the lion's share of Ciena revenue, with AT&T accounting for more than 18% in fiscal 2016. Any changes in the capital budget allocation of telcos will have a disproportionate impact on Ciena’s revenue.

3. The firm's narrowly focused product portfolio limits long-term revenue growth potential.

4. CIEN short share of float is 4.80%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock.

What are your thoughts on CIEN?

If you liked this analysis, check out Buy or Sell Stock Guides for other stocks.

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finstead Bites, please send us an email at hi@finstead.com.


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