Buy Ciena Corporation (CIEN) Stock Before the Ball REALLY Gets Rolling

Ciena Corporation (NYSE:CIEN) rose 2.51% in recent trade and currently has a stock-market value of $4.57B. The shares finished at $32.24, after trading as low as $30.67 earlier in the session. It hit an intraday high Thursday at $32.26. Trading activity significantly improved as the volume at ready counter increased to 3,633,397 shares versus 3,085,945 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 3,025,695 shares. The stock is now 61.28% above against its bear-market low of $19.99 on December 07, 2017. It has retreated -8.68% since it’s 52-week high of $35.04 reached in November. Now the market price is up 50.37% on the year and up 54.04% YTD.

CIEN’s 50 day simple moving average (SMA 50) price is $31.33 and its 200-day simple moving average (SMA 200) price is $27.63. The company’s stock currently has a total float of 141.25M shares. Its weekly volatility is hovering around 3.58% and felt 3.03% volatility in price over a month. On the upside, the share price will test short term resistance at around $32.78. On a downside, the stock is likely to find some support, which begins at $31.19. The failure to get near-term support could push it to $30.13.

Separately, it has been reported that multiple insider activity took place at Ciena Corporation (CIEN). PRESIDENT, CEO Smith Gary B sold 9,600 shares for $506,358 in transaction occurred on 2018/11/30. After making this transaction, the PRESIDENT, CEO owns a direct stake of 311,712 shares, worth $16,324,982, as per the last closing price. On 2018/11/28 Moylan James E Jr, SVP Finance, CFO at CIEN, dumped 2,000 shares at an average price of $31.74 per share. The selling total is valued at $11,373,047.

SR. VP, Chief Strategy Officer, Frodsham James had divested 2,000 shares for $151,396 through a trade on 2018/11/15. Following this activity, the insider holds 66,180 shares worth $4,881,007 as of recent close. Wall Street’s most bullish Ciena Corporation (NYSE:CIEN) analysts are predicting the share price to blow past $39 per share during the next 12 months. The current median share price forecast by them is $36, suggesting that the stock could increase 11.66% in that time frame. The average price target of $34.65 calls for a nearly 7.48% increase in the stock price.

It had seen a negative analyst call from Needham, which downgraded the stock from Buy to Hold on November 20. Analysts at Northland Capital, shed their positive views on October 01 by lowering it fromOutperform to Market Perform. The stock lost favor of Morgan Stanley analysts who expressed their lack of confidence in it using a downgrade from Overweight to Equal-Weight on September 13. Needham, reiterated their call for Buy, on August 31. On the other hand, they had set new target price to $33 versus $29.

When looking at valuations, Ciena Corporation (CIEN) has a cheap P/E of 4.83x as compared to industry average of 17.33x. Moreover, it trades for 17.86 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 2.6x price/book and 1.56x price/sales. Compared to others, Ciena Corporation is in a different league with regards to profitability, having net margins of 25.6%. To put some perspective around this, the industry’s average net margin is 5.34%. CIEN’s ROE is 40.5%, which is also considerably better than the industry’s ROE of 8.18%. It’s also very liquid in the near term, with a current ratio of 2. The stock has a debt/capital of 0.53.

Shares of Ciena Corporation (CIEN) have gained 15.2% since the company’s Oct-18 earnings report. Over the past 12 fiscal quarters, Ciena Corporation (NYSE:CIEN) has topped consensus earnings estimates in 6 quarters (50%), missed earnings in 5 quarters (41%), whereas at 1 occasion EPS met analyst expectations. CIEN last reported earnings on August 30, 2018 when it released Jul-18 results that exceeded expectations. The company raked in $0.48 per share, -98.57% change on the same period last year. That was better than consensus for $0.36. Revenue for the recent quarter stood at $818.82 million, up 12% on last year and above the $790.94 million predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $845.29 million to $875 million, which should be compared with $809.05 million generated last year. EPS is seen in a range of $0.42 to $0.54, against the $0.65 reported a year ago.