Fact based stock research
Ciena (NYSE:CIEN)

US1717793095

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Ciena stock research in summary

ciena.com

ANALYSIS: With an Obermatt Combined Rank of 80 (better than 80% compared with investment alternatives), Ciena (Communications Equipment, USA) shares have much better financial characteristics than comparable stocks. Shares of Ciena are low in value (priced high) with a consolidated Value Rank of 39 (worse than 61% of alternatives). But they show above-average growth (Growth Rank of 71) and are safely financed (Safety Rank of 77, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 80, is a strong buy recommendation based on Ciena's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Ciena exhibits low value (Obermatt Value Rank of 39), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 71). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 77) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	39
Growth Rank	71
Safety Rank	77
Combined Rank	80

Country	USA
Industry	Communications Equipment
Index	S&P MIDCAP
Size class	X-Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Ciena

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	30	37	44	39
GROWTH
GROWTH	35	73	61	71
SAFETY
SAFETY	77	88	70	77
SENTIMENT
SENTIMENT	n/a	71	54	^new
360° VIEW
360° VIEW	n/a	89	70	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 27-Jul-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Ciena is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	30	37	44	39
GROWTH
GROWTH	35	73	61	71
SAFETY
SAFETY	77	88	70	77
COMBINED
COMBINED	63	88	76	80

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Ciena the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 39 (worse than 61% compared with alternatives), Ciena shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators where three out of four are below average for Ciena. Only the Price-to-Book Capital ratio (also referred to as market-to-book ratio) indicates good stock value with a Price-to-Book Rank of 52, which means that the stock price is lower compared with invested capital than for 52% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 47 which means the stock price compared with what market professionals expect for future profits is higher than 53% of comparable companies, indicating a low value concerning Ciena's revenue levels. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Book Rank of 52 and for the dividend yields rank which is lower than for 99% of comparable companies, making the stock more expensive as regards to with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 39, is a hold recommendation based on Ciena's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for Ciena, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	36	44	55	47
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	85	45	54	46
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	29	50	64	52
DIVIDEND YIELD
DIVIDEND YIELD	1	1	1	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	30	37	44	39

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Ciena; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 71 (better than 71% compared with alternatives), Ciena shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Ciena. Capital Growth has a rank of 77, which means that currently professionals expect the company to grow its invested capital more than 32% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 69 (above 69% of alternative investments). But Sales Growth has only a rank of 47, which means that, currently, professionals expect the company to grow less than 53% of its competitors, and Profit Growth is also low at a rank of 32. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 71, is a buy recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Ciena, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	38	35	60	47
PROFIT GROWTH
PROFIT GROWTH	56	41	56	32
CAPITAL GROWTH
CAPITAL GROWTH	n/a	70	68	77
STOCK RETURNS
STOCK RETURNS	61	83	35	69
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	35	73	61	71

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Ciena.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 77 (better than 77% compared with alternatives) for 2024, the company Ciena has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Ciena is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Ciena. Refinancing is at 64, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 64% of its competitors. Liquidity is also good at 67, meaning the company generates more profit to service its debt than 67% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 38, which means the company has an above-average debt-to-equity ratio. It has more debt than 62% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 77 (better than 77% compared with alternatives), Ciena has a financing structure that is significantly safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Ciena could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with Ciena and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	61	64	38	38
REFINANCING
REFINANCING	53	63	77	64
LIQUIDITY
LIQUIDITY	84	80	44	67
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	77	88	70	77

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Ciena and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	81	89	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	57	1	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	7	30	^new
MARKET PULSE
MARKET PULSE	n/a	84	71	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	71	54	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Ciena.
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