Shares of networking equipment maker Ciena Corp (NYSE:CIEN) tanked on Friday despite an upbeat fiscal second-quarter report released on Thursday.
Here are some key analyst takeaways:
- Rosenblatt Securities analyst Mike Genovese reiterated a Buy rating, while raising the price target from $350 to $720.
- Needham analyst Ryan Koontz reiterated a Buy rating, while lifting the price target from $470 to $600.
Check out other analyst stock ratings.
Rosenblatt Securities: Ciena’s revenues grew 40% year-on-year and 10% sequentially to $1.57 billion, exceeded estimates by around 4%, Genovese said in a note. Although the company’s orders and gross margins were healthy, the figures missed “more bullish expectations that accompanied the stock’s roughly doubling in the three months” from the time the earnings were reported for the previous quarter, he added.
Ciena also raised its fiscal 2026 revenue growth guidance to 34%, from its prior projection of 28%, the analyst stated. There is upside to the stock, given Ciena’s projection of its TAM (total addressable market) growing at roughly 25% annually through 2029 to reach $50 billion as well as prospects of the company gaining market share, especially inside the Data Center, and its ongoing margin expansion, he further noted.
Needham: Ciena reported strong results and raised its full-year revenue guidance above consensus estimates, Koontz said. He noted the highlights from the print:
- Revenue of $1.571 billion above $1.505 billion consensus
- Non-GAAP earnings of $1.64 per share topping consensus of $1.46 per share
- Non-GAAP gross margins expanding by 390 basis points (bps) to 44.9%, above 44.0% consensus
- Non-GAAP operating margins of 19.5% beating consensus of 18.4%
Sales generated by the Direct Cloud segment grew 69% year-on-year and 27% sequentially, driven by AI investments, the analyst stated.
Ciena announced the following guidance:
- Revenues of $1.58-$1.68 billion for the fiscal third quarter, ahead of consensus of $1.55 billion.
- Raised revenue growth outlook for fiscal 2026 to around 32%, from prior guidance of 28%. This implies revenue growth of 25%-29% year-on-year in the back half of the year.
- Raised non-GAAP growth margin outlook to 44.5%-45.0%, from prior guidance of 43.5%-44.5%.
“With AI infrastructure spending on scale-across still in its early stages and new Multi-rail and intra-DC products coming to contribute in F27, we see meaningful upside to our increased F26 and F27 ests,” he further wrote.
CIEN Price Action: Shares of Ciena had declined by 5.91% to $503.96 at the time of publication on Friday.
