Ciena Stock Story

CIEN
 Stock
  

USD 51.63  0.92  1.75%   

Ciena Corp is currently does not generate positive expected returns and assumes 2.8073% risk (volatility on return distribution) over the 60 days horizon. Although many risk-takers are getting more into technology space, some of us are not very happy with Ciena Corp's current volatility. We are going to inspect if the current expected returns justify Ciena Corp's volatility. Ciena Corp's low volatility may still impact the value of the stock as we estimate it as currently undervalued. The real value, based on our analysis, is getting close to 65.26 per share.
Published over two months ago
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Is Ciena Corp (NYSE:CIEN) a good hedge for your existing portfolios?

The company currently holds 1.14 B in liabilities with Debt to Equity (D/E) ratio of 0.41, which is about average as compared to similar companies. Ciena Corp has a current ratio of 4.08, suggesting that it is liquid enough and is able to pay its financial obligations when due. Debt can assist Ciena Corp until it has trouble settling it off, either with new capital or with free cash flow. So, Ciena Corp's shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Ciena Corp sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Ciena to invest in growth at high rates of return. When we think about Ciena Corp's use of debt, we should always consider it together with cash and equity.
Volatility is a rate at which the price of Ciena Corp or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Ciena Corp may increase or decrease. In other words, similar to Ciena's beta indicator, it measures the risk of Ciena Corp and helps estimate the fluctuations that may happen in a short period of time. So if prices of Ciena Corp fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.

How important is Ciena Corp's Liquidity

Ciena Corp financial leverage refers to using borrowed capital as a funding source to finance Ciena Corp ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Ciena Corp financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Ciena Corp's total debt and its cash.

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 Corp, but it might be worth checking our own buy vs. sell analysis

Ciena Corp Volatility Drivers

Ciena Corp unsystematic risk is unique to Ciena Corp and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in Ciena Corp you can also buy Zebra Technologies. You can also mitigate this risk by investing in the communication equipment sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing Ciena Corp important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in Ciena Corp income statement and balance sheet. Here are more details about Ciena volatility.
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