Ciena Story

CIEN -- USA Stock

USD 55.12 0.12 0.22%

Macroaxis Story

Whilst many millenniums are getting more into technology space, it makes sense to outline Ciena. We will evaluate why we are still confident in anticipation of a recovery. Is the stock current valuation justified for 2020? Here i will cover my perspective on valuation to give Ciena institutional investors a better outlook on taking a position in the stock.

Published over a month ago

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The impact of latest bullish trends on Ciena (NYSE:CIEN)

The company currently holds 852.88 M in liabilities with Debt to Equity (D/E) ratio of 0.35, which is about average as compared to similar companies. Ciena has a current ratio of 3.49, suggesting that it is liquid enough and is able to pay its financial obligations when due. Ciena is UNDERVALUED at 49.13 per share with modest projections ahead.

We determine the current worth of Ciena using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Ciena based exclusively on its fundamental and basic technical indicators. By analyzing Ciena's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Ciena's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Ciena. We calculate exposure to Ciena's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Ciena's related companies.

Ciena Investment Alerts

Ciena investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Ciena performance across your portfolios.Please check all investment alerts for Ciena

Ciena Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Ciena value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Ciena competition to find correlations between indicators driving the intrinsic value of Ciena.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions. It is good to see analyst projects for Ciena, but it might be worth checking our own buy vs. sell analysis

Sale by Scott McFeely of 2000 shares of Ciena

Legal trades by Ciena insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:

Ciena insider trading alert for sale of common stock by Scott McFeely, SVP Networking Platforms, on 19th of January 2021. This event was filed by Ciena Corp with SEC on 2021-01-19. Statement of changes in beneficial ownership - SEC Form 4. Scott McFeely currently serves as senior vice president - networking platforms of Ciena [view details]

Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Breaking down Ciena Indicators

The entity reported the previous year's revenue of 3.67 B. Net Income was 376.58 M with profit before overhead, payroll, taxes, and interest of 1.54 B.

	2017	2018	2019	2020 (projected)
Interest Expense	55.25 M	37.45 M	43.07 M	48.36 M
Gross Profit	1.31 B	1.54 B	1.77 B	1.52 B

Interest Expense Gross Profit

Margins Breakdown

Ciena profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Ciena itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Ciena profit margins.

	Operating Margin	9.43
	EBITDA Margin	0.16
	Gross Margin	0.51
	Profit Margin	0.0881

Ciena Earnings Before Interest Taxes and Depreciation Amortization EBITDA is increasing over the last 8 years. The previous year's value of Ciena Earnings Before Interest Taxes and Depreciation Amortization EBITDA was 587,332,661. Also, Ciena Earnings Before Interest Taxes and Depreciation Amortization USD is quite stable at the moment.

Will Ciena slide impact its fundamentals?

Ciena latest market risk adjusted performance surges over 0.15. Ciena currently demonstrates below-verage downside deviation. It has Information Ratio of 0.02 and Jensen Alpha of 0.04. However, we do advice investors to further question Ciena expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk.

Our Final Take On Ciena

Whereas some firms within the communication equipment industry are still a little expensive, even after the recent corrections, Ciena may offer a potential longer-term growth to institutional investors. To sum up, as of the 10th of December 2020, our overall 30 days 'Buy-vs-Sell' recommendation on the company is Buy. We believe Ciena is undervalued with low probability of financial unrest for the next two years.

About Contributor

Raphi Shpitalnik is a Junior Member of Macroaxs Editorial Board. Raphael is a young entrepreneur who joined Macroaxis on a part-time base at the beginning of the pandemic and eventually acquired a real test for investing and fintech. He likes to analyze different equity instruments across a wide range of industries, focusing primarily on consumer products, sports, fintech, cannabis, and AI. View Profile

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Ciena. Please refer to our Terms of Use for any information regarding our disclosure principles.

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