Ciena (CIEN) AI Stock Analysis

• Market Cap: $10.43B
• Dividend Yield: N/A
• Average Volume (3M): 2.10M
• Price to Earnings (P/E): 102.7
• Beta (1Y): 1.70
• Revenue Growth: 2.86%
• EPS Growth: -29.92%
• Country: US
• Employees: 8,795
• Sector: Technology
• Sector Strength: 84
• Industry: Communication Equipment
• EPS (TTM): 0.42
• Shares Outstanding: 141,367,220
• 10 Day Avg. Volume: 3,825,719
• 30 Day Avg. Volume: 2,098,683
• PEG Ratio: -0.70
• Price to Book (P/B): 2.69
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -28.22
• Enterprise Value/Market Cap: 0.71
• Enterprise Value/Revenue: 0.46
• Enterprise Value/Gross Profit: 4.39
• Enterprise Value/Ebitda: 5.12
• 1Y Price Target: $84.23
• Price Target Upside: 14.19% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 63 Neutral
• Price Target: $79.00 ▲(7.10%Upside)

Ciena's overall stock score is driven primarily by solid financial performance and positive earnings call sentiment, despite technical indicators pointing to short-term bearish momentum and a high P/E ratio indicating potential overvaluation.

Positive Factors

Revenue Growth

Cloud provider revenues increased by 25% sequentially, largely due to significant deployments, indicating robust demand and growth potential.

Technology and Market Position

Ciena's position as a technology leader in the optical systems market is expected to benefit from strong investments from Cloud providers in data center interconnect.

Negative Factors

Profit Margins

Margins are under pressure due to the company's late entry into the pluggable market, though improvements are anticipated as volumes grow.

Valuation Concerns

Valuation remains expensive, with little room for multiple expansion.

Ciena Business Overview & Revenue Model

Company Description

Ciena Corporation provides network hardware, software, and services that support the transport, routing, switching, aggregation, service delivery, and management of video, data, and voice traffic on communications networks worldwide. The company's Networking Platforms segment offers hardware networking products and solutions that optimized for the convergence of coherent optical transport, optical transport network switching, and packet switching. Its products include 6500 Packet-Optical Platform, 5430 Reconfigurable Switching System, Waveserver stackable interconnect system, and the 6500 Reconfigurable line system, and the 5400 family of Packet-Optical platforms, as well as Z-Series Packet-Optical Platform; 3000 family of service delivery switches and service aggregation switches, and the 5000 family of service aggregation switches, as well as 8700 Packetwave Platform and the Ethernet packet configuration for the 5410 Service Aggregation Switch; and 6500 Packet Transport System. This segment also sells operating system software and enhanced software features embedded in each of its products. The company's Blue Planet Automation Software and Services segment provides multi-domain service orchestration, inventory, route optimization and analysis, network function virtualization orchestration, analytics, and related services. Its Platform Software and Service segment offers OneControl unified management system and platform software services, as well as manage, control, and plan software. The company's Global Services segment provides consulting and network design, installation and deployment, maintenance support, and training services. The company sells its products through direct and indirect sales channels to network operators. Ciena Corporation was founded in 1992 and is headquartered in Hanover, Maryland.

How the Company Makes Money

Ciena generates revenue primarily through the sale of its networking equipment and software solutions to telecommunications service providers, large enterprises, and web-scale companies. The company's key revenue streams include the sale of optical and packet networking hardware, network automation and control software, and associated professional services. Ciena's partnerships with major telecommunications companies and cloud providers also contribute significantly to its earnings by expanding its market reach and enhancing the scalability of its solutions. Additionally, the company's focus on innovation and the development of next-generation networking technologies, such as 5G and data center interconnect, play a critical role in driving its revenue growth.

Ciena Financial Statement Overview

Summary

Ciena exhibits stable financial health with strong cost management and a low leverage balance sheet. However, inconsistent revenue growth and decreasing capital efficiency present challenges for long-term profitability.

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.

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.

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.

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
338.42M	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
1.58B	1.63B	1.66B	1.13B	737.48M	763.74M
	Net Debt
703.68M	697.39M	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
205.10M	377.89M	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

• Technical Analysis Sentiment: Neutral
• Last Price: 73.76
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CIEN, the sentiment is Neutral. The current price of 73.76 is below the 20-day moving average (MA) of 78.04, above the 50-day MA of 71.27, and above the 200-day MA of 71.95, indicating a neutral trend. The MACD of -0.38 indicates Positive momentum. The RSI at 45.81 is Neutral, neither overbought nor oversold. The STOCH value of 16.71 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CIEN.

Ciena Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CSCO	78 Outperform	$253.80B	26.27	21.36%	2.56%	0.47%	-17.77%
JNPR	68 Neutral	$11.96B	34.19	7.58%	2.46%	-2.56%	52.05%
ERIC	68 Neutral	$27.93B	178.68	1.67%	0.31%	-2.08%	―
NOK	64 Neutral	$27.79B	35.33	5.70%	3.98%	-9.96%	-6.83%
CIEN	63 Neutral	$10.43B	102.74	3.71%	―	2.86%	-29.92%
Sector *	62 Neutral	$11.97B	10.29	-7.47%	2.99%	7.32%	-8.06%
LITE	62 Neutral	$5.95B	―	-42.79%	―	3.58%	-22.74%

Ciena Corporate Events

Ciena Updates Board, Bylaws, and Reports Financial Results

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.