Ciena Stock To $158?
Ciena (CIEN) stock has fallen 13% during the past day, and is currently trading at $225.21. Our multi-factor assessment suggests that it may be time to sell CIEN stock. We have, overall, a pessimistic view of the stock, and a price of $158 may not be out of reach. We believe there are only a couple of things to fear in CIEN stock given its overall Moderate operating performance and financial condition. But keeping in mind its Very High valuation, we think that the stock is Unattractive.
Below is our assessment:
| CONCLUSION | |
|---|---|
| What you pay: | |
| Valuation | Very High |
| What you get: | |
| Growth | Very Strong |
| Profitability | Weak |
| Financial Stability | Very Strong |
| Downturn Resilience | Very Weak |
| Operating Performance | Moderate |
| Stock Opinion | Unattractive |
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Let’s get into details of each of the assessed factors but before that, for quick background: With $32 Bil in market cap, Ciena provides network hardware, software, and services for transport, routing, switching, and management of video, data, and voice traffic, optimizing coherent optical and packet switching platforms.
[1] Valuation Looks Very High
| CIEN | S&P 500 | |
|---|---|---|
| Price-to-Sales Ratio | 6.7 | 3.3 |
| Price-to-Earnings Ratio | 259.0 | 23.7 |
| Price-to-Free Cash Flow Ratio | 48.0 | 21.1 |
This table highlights how CIEN is valued vs broader market. For more details see: CIEN Valuation Ratios
[2] Growth Is Very Strong
- Ciena has seen its top line grow at an average rate of 10.4% over the last 3 years
- Its revenues have grown 19% from $4.0 Bil to $4.8 Bil in the last 12 months
- Also, its quarterly revenues grew 20.3% to $1.4 Bil in the most recent quarter from $1.1 Bil a year ago.
| CIEN | S&P 500 | |
|---|---|---|
| 3-Year Average | 10.4% | 5.6% |
| Latest Twelve Months* | 18.8% | 6.2% |
| Most Recent Quarter (YoY)* | 20.3% | 7.3% |
This table highlights how CIEN is growing vs broader market. For more details see: CIEN Revenue Comparison
[3] Profitability Appears Weak
- CIEN last 12 month operating income was $311 Mil representing operating margin of 6.5%
- With cash flow margin of 16.9%, it generated nearly $806 Mil in operating cash flow over this period
- For the same period, CIEN generated nearly $123 Mil in net income, suggesting net margin of about 2.6%
| CIEN | S&P 500 | |
|---|---|---|
| Current Operating Margin | 6.5% | 18.8% |
| Current OCF Margin | 16.9% | 20.5% |
| Current Net Income Margin | 2.6% | 13.1% |
This table highlights how CIEN profitability vs broader market. For more details see: CIEN Operating Income Comparison
[4] Financial Stability Looks Very Strong
- CIEN Debt was $1.6 Bil at the end of the most recent quarter, while its current Market Cap is $32 Bil. This implies Debt-to-Equity Ratio of 5.1%
- CIEN Cash (including cash equivalents) makes up $1.3 Bil of $5.9 Bil in total Assets. This yields a Cash-to-Assets Ratio of 22.3%
| CIEN | S&P 500 | |
|---|---|---|
| Current Debt-to-Equity Ratio | 5.1% | 20.4% |
| Current Cash-to-Assets Ratio | 22.3% | 7.2% |
[5] Downturn Resilience Is Very Weak
CIEN has fared much worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
2022 Inflation Shock
- CIEN stock fell 49.5% from a high of $77.60 on 29 December 2021 to $39.16 on 11 October 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 12 December 2024
- Since then, the stock increased to a high of $259.27 on 7 January 2026 , and currently trades at $225.21
| CIEN | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -49.5% | -25.4% |
| Time to Full Recovery | 793 days | 464 days |
2020 Covid Pandemic
- CIEN stock fell 37.0% from a high of $60.99 on 7 August 2020 to $38.44 on 28 October 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 12 November 2021
| CIEN | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -37.0% | -33.9% |
| Time to Full Recovery | 380 days | 148 days |
2008 Global Financial Crisis
- CIEN stock fell 89.5% from a high of $48.70 on 29 October 2007 to $5.09 on 23 February 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 27 April 2020
| CIEN | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -89.5% | -56.8% |
| Time to Full Recovery | 4,081 days | 1,480 days |
But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read CIEN Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
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