GrowthTurtle
Data Science PhD & IEEE Fellow, Ex-Two Sigma
Ciena looks expensive against its earnings: it trades at about 30 times next year's estimated $10.68 a share, versus the 18 times the industry usually gets. That implies fair value of about $169-215, putting the stock 47% above the high end. The read leans on forecasts, since forward earnings are 226% above trailing, and is based on levels only, with no fundamental work. x.comÂ
Ciena looks stretched after rising eightfold in a year to 264x earnings, making it a short candidate around $425-447 once the move up exhausts itself. x.com x.comÂ
Ciena looks dicey beyond the short term, in line with a Seeking Alpha article by Wail Shudar written shortly before its earnings plunge. A post the author replies to notes the stock is now technically in a much better place. x.com x.comÂ
Ciena is 47% off its high after a valuation selloff despite strong hyperscaler-driven growth. Revenue grew 37% to $1.67B and adjusted EPS tripled. Backlog is $8.5B and expected to pass $10B by year-end, half of revenue now comes directly from hyperscalers, and data center revenue has quadrupled this year. Management's preliminary 2027 outlook of at least $8.3B implies another 30% growth, with supply tight until 2028. x.comÂ
Nokia does not deserve the roughly 50x multiples of optical pure plays like Ciena and Coherent, because it still carries large, shrinking legacy businesses in wireless, PON and routing. This rebuts Citron Research's case that comparisons with those peers make Nokia a $20 stock. x.comÂ
Ciena's stronger moat justifies its richer valuation versus Credo, and its recent guidance was good. x.comÂ
Ciena is an important but quiet beneficiary of the AI buildout, and its new three-year targets show it. By 2029 it aims to grow revenue about 30% a year, reach roughly 50% gross margin and generate about 20% free cash flow margin. CEO Gary Smith has led it for over 25 years, through the dotcom bust and the financial crisis, when shares hit an all-time low near $5. x.comÂ
Ciena is safe to hold after a massive guide-up. Q2 non-GAAP operating margin reached 19.5%, up 11.3 points, revenue rose 39.5% to $1.57B, and Q3 revenue guidance of $1.625B plus or minus $50M topped the Street's $1.55B, with fiscal 2026 guided to $6.30B. x.comÂ
Ciena's new 2029 margin target depends on price increases sticking after the optical shortage ends. Its investor forum set about $14bn of 2029 revenue, roughly 30% a year from 2026, adjusted gross margin near 50% and 32-35% operating margin. Orders grew 79% a year and backlog 118% from 2024 to 2026, and the CFO sees no supply-demand balance before 2028. But price hikes of high single digits to low 20s are a key margin lever, so whether fiscal 2027 margin holds 45-46% is the test. x.comÂ
Ciena's 30% drop from its high has nothing to do with the business, and both sell-off catalysts have now cleared. It beat EPS by 12%, grew revenue 40% and raised guidance to $6.3B, in line with consensus after a 200% run, while a $2.875B convertible added hedge selling through June 11. Hyperscalers are linking GPU clusters across cities and continents with 800G and 1.6T coherent optics, where Ciena leads data center interconnect, a market doubling to $50B by 2029. Backlog is $7.7B. x.comÂ
Ciena's selloff priced a slowdown from 35% to 30% growth, but most of that 30% is already sold at prices Ciena is still raising. Q3 revenue rose 37% to $1.67B, the FY26 guide rose to $6.42B, and the early FY27 floor is at least 30% growth with at least 45% gross margin. Backlog hit $8.5B, expected above $10B by year end, mostly with customer-requested 2027 dates. Ciena is raising prices from high single digits into the low 20s, even on signed orders, which no one does into softening demand. … Show more
