Ciena (CIEN): Evaluating Valuation After Strong Results and WaveLogic 6 Extreme’s Major Constl Deployment in India

Ciena (CIEN) is back in the spotlight after Constl rolled out its WaveLogic 6 Extreme platform across the crucial Mumbai to Chennai corridor, following a Q3 revenue beat driven by cloud demand.

See our latest analysis for Ciena.

Those hyperscaler driven beats and the Constl rollout have not gone unnoticed, with the share price now at $195.73 and a powerful 90 day share price return of 67.73 percent feeding into a 170.98 percent one year total shareholder return. This suggests momentum is firmly building rather than fading.

If Ciena’s run has you thinking about what else could surprise to the upside, this is a good moment to explore fast growing stocks with high insider ownership.

Yet with the stock now trading well above the average analyst target and conventional valuation models flashing rich, investors face a pivotal question: Is Ciena still a buy, or is the market already pricing in every ounce of future growth?

Most Popular Narrative Narrative: 28.2% Overvalued

With the narrative fair value sitting well below Ciena’s last close at $195.73, investors are being asked to price in a very ambitious future.

The analysts have a consensus price target of $120.406 for Ciena based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $150.0, and the most bearish reporting a price target of just $79.0.

Read the complete narrative.

Want to see what justifies this rich setup, from rapid earnings compounding to a premium future profit multiple, and how those moving pieces translate into today’s fair value tag? Read on.

Result: Fair Value of $152.63 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, heavy reliance on a handful of hyperscale customers and rapid shifts toward open networking could quickly undermine today’s premium growth narrative.

Find out about the key risks to this Ciena narrative.

Build Your Own Ciena Narrative

If this view does not quite match your own, or you would rather dig into the numbers yourself, you can build a tailored narrative in just a few minutes: Do it your way.

A great starting point for your Ciena research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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