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. Financial leverage can amplify the potential profits to Ciena Corp's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Ciena Corp's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Ciena Corp's total debt and its cash.
Ciena Corp Gross Profit
Ciena Corp Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Ciena Corp previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Ciena Corp Gross Profit growth over the last 10 years. Please check Ciena Corp's
gross profit and other
fundamental indicators for more details.
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
Fabrinet. You can also mitigate this risk by investing in the information technology 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.
Click cells to compare fundamentals
What is driving Ciena Corp Investor Appetite?
The entity reported the previous year's revenue of 3.71
B. Net Income was 490.67
M with profit before overhead, payroll, taxes, and interest of 1.72
B.
Ciena may start a correction in July
Latest treynor ratio indicator falls down to -0.24. Possible price upswing? Ciena Corp exhibits very low volatility with skewness of -0.55 and kurtosis of 1.62. However, we advise investors to further study Ciena Corp technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Ciena Corp's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Ciena Corp's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
Ciena Corp Implied Volatility
Ciena Corp's implied volatility exposes the market's sentiment of Ciena Corp stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Ciena Corp's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Ciena Corp stock will not fluctuate a lot when Ciena Corp's options are near their expiration.
Our Final Perspective on Ciena Corp
Whereas few other entities in the communication equipment industry are either recovering or due for a correction, Ciena Corp may not be performing as strong as the other in terms of long-term growth potentials. With a relatively neutral outlook on the latest economy, it is better to hold off any trading of Ciena as the current risk-reward utility is not appealing enough. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Ciena Corp.
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Ellen Johnson is a Member of Macroaxis Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in predictive investment analytics and risk management.
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 Ellen Johnson do not own shares of Ciena Corp. Please refer to our
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