Ciena (NYSE:CIEN) Earns Buy Rating from Analysts at TD Cowen

Key Points

• TD Cowen initiated coverage with a Buy rating and a $425 price target (≈25% upside), and several other firms have raised ratings/targets leaving the consensus at a Moderate Buy with an average price target of $320.65.
• Ciena beat quarterly expectations with $1.35 EPS vs. $1.17 estimated and revenue of $1.43B (up 33.1% YoY), though the stock trades at a high valuation (PE ≈216) and was trading near recent highs around $340.
• Insiders sold roughly 156,235 shares (~$36.9M) in the past three months, while institutional ownership is very high (~91.99%), led by large positions from Vanguard, JPMorgan, State Street and T. Rowe Price.

Equities researchers at TD Cowen began coverage on shares of Ciena (NYSE:CIEN - Get Free Report) in a research note issued on Thursday. The brokerage set a "buy" rating and a $425.00 price target on the communications equipment provider's stock. TD Cowen's price target suggests a potential upside of 24.99% from the company's previous close.

A number of other research analysts have also weighed in on the stock. Bank of America raised shares of Ciena from a "neutral" rating to a "buy" rating and raised their price target for the company from $260.00 to $355.00 in a research note on Friday, March 6th. JPMorgan Chase & Co. increased their target price on Ciena from $250.00 to $380.00 and gave the company an "overweight" rating in a report on Monday, March 2nd. Stifel Nicolaus restated a "buy" rating and issued a $320.00 target price (up from $280.00) on shares of Ciena in a research report on Thursday, March 5th. Barclays lifted their price target on Ciena from $279.00 to $372.00 and gave the stock an "overweight" rating in a research note on Friday, March 6th. Finally, Needham & Company LLC increased their price objective on Ciena from $280.00 to $370.00 and gave the company a "buy" rating in a research note on Thursday, March 5th. Twelve investment analysts have rated the stock with a Buy rating and seven have issued a Hold rating to the stock. According to data from MarketBeat, the company currently has an average rating of "Moderate Buy" and an average price target of $320.65.

Ciena Stock Performance

Shares of CIEN stock opened at $340.02 on Thursday. Ciena has a 52-week low of $49.21 and a 52-week high of $365.90. The company has a quick ratio of 2.14, a current ratio of 2.81 and a debt-to-equity ratio of 0.55. The stock has a market cap of $48.08 billion, a PE ratio of 216.57, a price-to-earnings-growth ratio of 1.48 and a beta of 1.08. The business has a 50-day simple moving average of $280.52 and a 200-day simple moving average of $211.00.

Ciena (NYSE:CIEN - Get Free Report) last released its quarterly earnings results on Thursday, March 5th. The communications equipment provider reported $1.35 EPS for the quarter, beating the consensus estimate of $1.17 by $0.18. Ciena had a net margin of 4.47% and a return on equity of 12.09%. The company had revenue of $1.43 billion for the quarter, compared to analyst estimates of $1.40 billion. During the same quarter last year, the business earned $0.64 earnings per share. The firm's revenue was up 33.1% on a year-over-year basis. On average, equities analysts expect that Ciena will post 1.6 EPS for the current year.

Insider Activity at Ciena

In other news, SVP Joseph Cumello sold 11,929 shares of the business's stock in a transaction dated Monday, January 12th. The shares were sold at an average price of $229.82, for a total transaction of $2,741,522.78. Following the transaction, the senior vice president owned 49,475 shares of the company's stock, valued at approximately $11,370,344.50. The trade was a 19.43% decrease in their position. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, Director Patrick Gallagher sold 11,618 shares of the company's stock in a transaction dated Monday, January 12th. The shares were sold at an average price of $227.45, for a total transaction of $2,642,514.10. Following the completion of the sale, the director directly owned 50,184 shares of the company's stock, valued at $11,414,350.80. This represents a 18.80% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold a total of 156,235 shares of company stock valued at $36,941,890 in the last three months. Company insiders own 0.58% of the company's stock.

Hedge Funds Weigh In On Ciena

Institutional investors have recently bought and sold shares of the company. Vanguard Group Inc. increased its holdings in shares of Ciena by 0.7% during the 2nd quarter. Vanguard Group Inc. now owns 15,088,445 shares of the communications equipment provider's stock worth $1,227,143,000 after buying an additional 103,199 shares during the last quarter. Elyxium Wealth LLC purchased a new position in Ciena in the fourth quarter worth approximately $2,747,810,000. JPMorgan Chase & Co. increased its stake in Ciena by 23.3% during the third quarter. JPMorgan Chase & Co. now owns 6,462,840 shares of the communications equipment provider's stock worth $941,451,000 after acquiring an additional 1,219,787 shares during the last quarter. State Street Corp increased its stake in Ciena by 17.2% during the fourth quarter. State Street Corp now owns 5,102,409 shares of the communications equipment provider's stock worth $1,193,300,000 after acquiring an additional 750,128 shares during the last quarter. Finally, Price T Rowe Associates Inc. MD raised its position in Ciena by 53.0% in the fourth quarter. Price T Rowe Associates Inc. MD now owns 4,051,625 shares of the communications equipment provider's stock valued at $947,554,000 after purchasing an additional 1,404,132 shares during the period. 91.99% of the stock is owned by hedge funds and other institutional investors.

Ciena Company Profile

Ciena Corporation NYSE: CIEN is a global supplier of telecommunications networking equipment, software and services. The company develops high-capacity optical transport systems and packet-optical platforms that enable service providers, cloud operators and large enterprises to build, manage and scale their networks. Ciena's product portfolio includes coherent optical solutions, packet networking platforms and a suite of network automation software designed to optimize bandwidth, reduce latency and simplify network operations.

In addition to hardware offerings, Ciena provides professional services and support, including network design, implementation and ongoing maintenance.

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