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Ciena Corporation (CIEN)
:CIEN
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Ciena
(NYSE:CIEN)
67Neutral
Positive Factors
Financial Performance
CIEN reported strong F1Q25 results, with revenues and non-GAAP EPS above consensus.
Market Position
Strong execution paired with best-in-class technology and customer relationships should see CIEN continue to gain meaningful market share in its core total addressable market.
Negative Factors
Tariff Risks
Production concentration in Mexico / Thailand and uncertainty around potential incremental tariffs make analysts comfortable on the sidelines.
Ciena (CIEN) vs. S&P 500 (SPY)
Market Cap
$9.47B
Dividend YieldN/A
Average Volume (3M)2.65M
Price to Earnings (P/E)115.4
Beta (1Y)1.78
Revenue Growth-7.29%
EPS Growth-64.31%
CountryUS
Employees8,657
SectorTechnology
Sector Strength54
IndustryHardware & Equipment
Share Statistics
EPS (TTM)0.54
Shares Outstanding142,591,830
10 Day Avg. Volume3,733,592
30 Day Avg. Volume2,653,690
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.35
Price to Cash Flow (P/CF)6.80
P/FCF Ratio6.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$85.79Price Target Upside37.68% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
Ciena Business Overview & Revenue Model
Company DescriptionCiena Corp. engages in the provision of network and communication infrastructure. It operates through the following segments: Converged Packet Optical; Packet Networking; Optical Transport; and Software and Services. The Converged Packet Optical segment develops and sells optical processors, switching systems and operating system software. The Packet Networking segment includes service delivery switches, services aggregation switches, and ethernet packet configurations. The Optical Transport segment manufactures and trades optical transport systems, common photonic layer, data networking products, data center interconnection and virtual networks. The Software and Services segment provides wide area network controller, network functions virtualization platform, and software applications. The company was founded by Patrick H. Nettles in November 1992 and is headquartered in Hanover, MD.
How the Company Makes MoneyCiena makes money through the sale of its hardware and software products, as well as professional services. Its revenue streams are primarily derived from network hardware sales, which include optical transport and switching equipment. Additionally, Ciena generates income from software sales related to network management and automation, as well as from professional services such as consulting, design, and implementation support. Key factors contributing to its earnings include long-term contracts with major telecommunications companies and strategic partnerships that enhance its product offerings and market reach.
Ciena Financial Statement Overview
Summary
Ciena's financial performance demonstrates a stable position with effective cost management and low leverage. The income statement shows solid profitability, though revenue growth has been inconsistent. The balance sheet is strong with low debt and high equity, while cash flow indicates resilience despite decreased capital efficiency.Income Statement
Ciena's income statement reflects a solid performance with a Gross Profit Margin of 41.8% and a Net Profit Margin of 1.95% for TTM (Trailing-Twelve-Months), indicating strength in cost management and profitability despite competitive pressures. However, the revenue growth has been inconsistent, with a slight decrease to $4.05 billion from $4.39 billion in the previous year, which is a potential concern for future growth.75
Positive
Balance Sheet
The balance sheet is strong with a Debt-to-Equity Ratio of 0.08, reflecting low leverage and financial stability. The Equity Ratio stands at 50.1%, highlighting a balanced capital structure with adequate shareholder equity supporting assets. Return on Equity (ROE) is modest at 2.83%, suggesting room for improvement in generating returns for shareholders.80
Positive
Cash Flow
Ciena's cash flow statement shows resilience with positive Operating Cash Flow of $352 million in TTM. The Free Cash Flow has decreased compared to previous periods, at $232 million, reflecting lower capital efficiency. The Operating Cash Flow to Net Income Ratio is robust at 4.46, indicating strong cash generation relative to net income.70
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 4.05B | 4.01B | 4.39B | 3.63B | 3.62B | 3.53B |
| Gross Profit | |||||
| 1.69B | 1.72B | 1.88B | 1.56B | 1.72B | 1.65B |
| EBIT | |||||
| 178.31M | 166.62M | 357.55M | 222.81M | 495.36M | 486.96M |
| EBITDA | |||||
| 294.11M | 350.35M | 527.03M | 397.43M | 618.48M | 646.17M |
| Net Income Common Stockholders | |||||
| 78.98M | 83.96M | 254.83M | 152.90M | 500.20M | 361.29M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.21B | 1.25B | 1.12B | 1.15B | 1.60B | 1.24B |
| Total Assets | |||||
| 5.57B | 5.64B | 5.60B | 5.07B | 4.87B | 4.18B |
| Total Debt | |||||
| 233.37M | 237.20M | 1.66B | 1.13B | 737.48M | 763.74M |
| Net Debt | |||||
| -641.38M | -697.66M | 646.55M | 135.02M | -685.07M | -324.89M |
| Total Liabilities | |||||
| 2.78B | 2.83B | 2.75B | 2.36B | 1.85B | 1.67B |
| Stockholders Equity | |||||
| 2.79B | 2.82B | 2.85B | 2.71B | 3.02B | 2.51B |
| Cash Flow | Free Cash Flow | ||||
| 231.99M | 514.53M | 62.13M | -258.57M | 462.10M | 410.99M |
| Operating Cash Flow | |||||
| 352.03M | 514.53M | 168.33M | -167.76M | 541.65M | 493.65M |
| Investing Cash Flow | |||||
| -391.70M | -306.48M | -383.45M | -101.25M | -90.72M | -220.24M |
| Financing Cash Flow | |||||
| -343.65M | -285.06M | 229.38M | -133.06M | -116.83M | -87.22M |
Ciena Technical Analysis
Negative
62.31
Price Trends
82.65
Negative
77.62
Negative
65.36
Negative
Market Momentum
-5.66
Positive
28.24
Positive
22.58
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CIEN, the sentiment is Negative. The current price of 62.31 is below the 20-day moving average (MA) of 77.14, below the 50-day MA of 82.65, and below the 200-day MA of 65.36, indicating a bearish trend. The MACD of -5.66 indicates Positive momentum. The RSI at 28.24 is Positive, neither overbought nor oversold. The STOCH value of 22.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CIEN.
Ciena Risk Analysis
Ciena disclosed 42 risk factors in its most recent earnings report. Ciena reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ciena Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $101.21B | 36.00 | 33.14% | ― | 19.50% | 34.64% | |
74 Outperform | $240.53B | 26.49 | 20.02% | 2.65% | -5.34% | -30.57% | |
67 Neutral | $9.47B | 115.43 | 2.76% | ― | -7.29% | -64.31% | |
60 Neutral | $11.86B | 41.39 | 6.21% | 2.47% | -8.82% | -10.01% | |
58 Neutral | $21.67B | 10.04 | -18.58% | 2.39% | 5.01% | -23.17% | |
45 Neutral | $1.57B | ― | -90.26% | ― | -12.12% | -469.62% | |
44 Neutral | $1.90B | ― | -152.77% | ― | -24.49% | -250.61% |
* Technology Sector Average
Performance Comparison
CIEN
Ciena
62.31
12.29
24.57%
CSCO
Cisco Systems
59.67
12.24
25.81%
EXTR
Extreme Networks
14.18
2.88
25.49%
INFN
Infinera
6.64
2.11
46.58%
JNPR
Juniper Networks
35.56
0.20
0.57%
ANET
Arista Networks
80.14
10.71
15.43%
Ciena Earnings Call Summary
Earnings Call Date: Mar 11, 2025 | % Change Since: -4.91% | Next Earnings Date: Jun 5, 2025
Earnings Call Sentiment Positive
The overall sentiment of the earnings call is positive, driven by strong financial results, robust demand from cloud providers and service providers, and successful product rollouts like WaveLogic 6 Extreme. However, there are challenges related to tariff uncertainties and potential variability in revenue growth due to project timing with cloud providers.Highlights
Strong Fiscal First Quarter Results
Ciena delivered strong fiscal first quarter results with revenue of $1.07 billion, adjusted gross margin of 44.7%, and adjusted EPS of $0.64 per share.
Robust Order Flow
The quarter saw positive demand dynamics with very strong order flow, especially from cloud providers, which accounted for half of the overall orders in Q1.
Service Provider Revenue Growth
Service provider revenue in Q1 increased 14% year-over-year, comprising approximately 51% of total revenue, signaling a recovery in this segment.
Cloud Provider Engagement
Total direct cloud revenue comprised 32% of total revenue, with five cloud providers in the top 10 customers for the quarter.
WaveLogic 6 Extreme Success
WaveLogic 6 Extreme is gaining momentum, with 20 new customers added in Q1, part of a successful rollout of high-speed connectivity solutions.
Strong Cash Position and Share Repurchase
Ciena ended the quarter with approximately $1.3 billion in cash and investments and repurchased approximately 1 million shares for $79 million during the first quarter.
Lowlights
Tariff Uncertainties
Ciena acknowledged the potential for disruption in the U.S. and international economy due to tariffs and retaliatory actions, though their guidance does not include potential effects from additional tariffs.
Gross Margin Challenges
Despite a strong gross margin in Q1, the quarter included several non-recurring events that are not expected to continue in Q2, with gross margin expected to be in the low 40% range.
Seasonal Revenue Variability
Ciena's revenue growth for the upcoming quarter is guided at a lower level than historical seasonality, attributed to variability in cloud provider project timing.
Company Guidance
In the Ciena Fiscal First Quarter 2025 Financial Results Conference Call, the company provided guidance indicating robust performance and growth expectations. Ciena reported strong fiscal first quarter results with revenue reaching $1.07 billion, an adjusted gross margin of 44.7%, and an adjusted EPS of $0.64 per share. Notably, the company witnessed a significant increase in demand from cloud providers, with direct orders from this segment comprising half of the overall orders in Q1. Service provider revenue also showed strength, increasing by 14% year-over-year and making up approximately 51% of the total revenue. For the fiscal second quarter, Ciena projected revenue between $1.05 billion to $1.13 billion, while maintaining their annual revenue growth guidance towards the high end of the 8% to 11% range. Adjusted gross margin expectations were set in the low 40% range for Q2, with full-year margins anticipated to be between 42% to 44%. The company also highlighted ongoing investments in their WaveLogic technology and a strong pipeline of opportunities in high-speed connectivity driven by cloud and AI traffic.Ciena Corporate Events
Executive/Board ChangesFinancial Disclosures
Ciena Updates Board, Bylaws, and Reports Financial Results
Neutral
Dec 12, 2024
Ciena announced changes in its Board of Directors with the retirement of Patrick H. Nettles and the appointment of Lawton W. Fitt as independent Chair. These changes accompany a review and amendment of Ciena’s bylaws, which aim to clarify procedural mechanics for stockholder nominations and proposals. Additionally, Ciena reported its fiscal fourth quarter 2024 financial results, showing a slight decline in revenue and net income compared to the previous year, but emphasized its technology leadership and potential for future growth driven by cloud and AI demands.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.