Infinera Corporation (INFN) - NASDAQ
  • Fri, Jan. 22, 3:30 PM
    • Plenty of tech names crushed over the first 20 days or so of January are sharply higher as the Nasdaq (up 2.4%) continues rebounding from Wednesday's intraday lows. Many still have sizable YTD losses.
    • Big gainers among telecom equipment/component firms: Optical component vendors Oclaro (OCLR +9.5%) and NeoPhotonics (NPTN +6%), mobile infrastructure/services giant Ericsson (ERIC +6.2%), optical networking hardware vendor Infinera (INFN +5.2%), and microcap RF backhaul hardware firms DragonWave (DRWI +24.3%) and Ceragon (CRNT +10%). Ericsson underperformed yesterday following a pre-earnings Goldman downgrade.
    • Among enterprise tech firms: Threat-prevention technology and services provider FireEye (FEYE +7.7%), big data software provider Hortonworks (HDP +16.1%), security software/services firm Rapid7 (RPD +9.1%), data governance software firm Varonis (VRNS +5.6%), and flash storage array vendor Violin Memory (VMEM +13.6%). FireEye fell slightly yesterday after making a Q4 pre-announcement and announcing a $200M+ acquisition. Hortonworks was crushed on Tuesday after a Q4 pre-announcement and stock offering shelf registration.
    • Among chip industry firms: RF chipmaker Skyworks (SWKS +6%), audio codec developer Cirrus Logic (CRUS +7.3%), smart TV/home automation chipmaker Sigma Designs (SIGM +6.5%), FPGA/sensor hub maker QuickLogic (QUIK +9.2%), and chip equipment firms Axcelis (ACLS +4.9%) and Aixtron (AIXG +4.9%). Major Cirrus/Skyworks client Apple reports on Tuesday afternoon.
    • Also up big: 3D printer maker 3D Systems (DDD +7.1%), Russian search leader Yandex (YNDX +7.5%), mortgage origination software firm Ellie Mae (ELLI +6.4%), Chinese solar firm Yingli (YGE +11.4%), and SMB Web services provider Wix.com (WIX +5.3%).
    • Previously covered: Rosetta Stone, Live Ventures, HP Enterprise, Mitel, Mobileye, Qorvo, SunPower, SolarCity
    | Fri, Jan. 22, 3:30 PM | 6 Comments
  • Wed, Jan. 20, 1:18 PM
    • Like clockwork, high-beta tech stocks continue selling off at a feverish pace as markets nosedive. Today's selloff comes with the Nasdaq down 2.7%, and the S&P 3%. Margin calls are likely a contributing factor.
    • Solar stocks, which sold off yesterday even as major indices moved little, are underperforming again as energy stocks get routed once more and oil drops below $27/barrel. Hard-luck SunEdison (SUNE -13.6%) is now close to $2. Also tumbling: Canadian Solar (CSIQ -8.8%), ReneSola (SOL -8.2%), and Yingli (YGE -6.9%).
    • Security tech plays FireEye (FEYE -9.3%), Palo Alto Networks (PANW -6.1%), Rapid7 (RPD -11.6%), and Vasco (VDSI -10.5%) aren't faring better - peers Fortinet and Barrcauda were downgraded this morning. Nor are Splunk (SPLK -7.7%) and Tableau (DATA -7.2%), two firms often hyped as big data/analytics plays, or Russian tech firms Yandex (YNDX -6.6%) and Qiwi (QIWI -6.9%), which often sell off when oil prices and the ruble are under pressure.
    • Elsewhere in tech, big decliners include Zillow (Z -7.1%), Square (SQ -6.7%), Fitbit (FIT -6.6%), Groupon (GRPN -6.9%), TrueCar (TRUE -7.7%), Pure Storage (PSTG -7.8%), Jive Software (JIVE -7.4%), Shopify (SHOP -7.2%), Ruckus Wireless (RKUS -8%), Renren (RENN -6.8%), Infinera (INFN -6.1%), TripAdvisor (TRIP -6.5%), Ellie Mae (ELLI -6.7%), and Knowles (KN -6.2%).
    • Also off sharply: Several large-cap tech stocks, TowerJazz, Synaptics, Adtran
    | Wed, Jan. 20, 1:18 PM | 20 Comments
  • Dec. 30, 2015, 5:43 PM
    • Though a fan of optical networking hardware vendors Ciena (NYSE:CIEN), Infinera (NASDAQ:INFN), and Xtera (NASDAQ:XCOM), Needham's Alex Henderson thinks many component makers have more 2016 upside. "We see more upside to revenues, better margin leverage, and more room for valuation improvements with the component names. We point out the current supply constraints on broad classes of Optical components at the end of CY15, which we expect to persist through CY16."
    • He sees 2016 as a good year for optical, and 2017/2018 even better ones. "The driver of this should be the continuing strong growth in the [data center interconnect] market and the substantial ramp-up of the Metro Core Market. We strongly believe CY16 is the beginning of the Metro 100G/200G cycle, which should last through CY2020."
    • Lumentum (NASDAQ:LITE), formerly JDS Uniphase's component arm, is one of Henderson's favorites. "LITE has roughly 50% of its optical product line in sold- out conditions well into CY16. The Industrial laser business is also likely to accelerate ... [supply constraints] reflect strong demand across numerous segments ... including Long-Haul and [data center interconnect] with Coherent modulators, Metro with ROADMs, and Access Metro with the T-XFP 10G transceivers. LITE is currently trading at 13x [enterprise value/EPS] on CY16 estimates and just 1.1x [enterprise value/sales]."
    • He also likes Fabrinet (NYSE:FN), citing a valuation of 0.7x EV/sales and 9x EV/EPS, and Oclaro (NASDAQ:OCLR). “[T]he primary reason we are recommending [Oclaro] is the ACO 100G Coherent pluggable [transceiver]. Oclaro is first to market in this emerging category and if they ramp production smoothly we think they can sell whatever they can produce.”
    • Looking at networking hardware firms, Henderson likes data center switch vendor Arista (NYSE:ANET) and networking visibility/monitoring hardware firm Gigamon (NYSE:GIMO). Arista is expected to benefit from 25G Ethernet adoption and the rollout of Broadcom's Jericho switching chip, which contains a 720Gbps packet processor and will allow Arista's gear to support edge routing functionality at much lower costs than rivals (read: Cisco). "We think Arista could pick up 3-5 points of market share, which we calculate could drive over 30% top-line growth."
    • Regarding Gigamon: "After a strong year in CY15, Gigamon is likely to produce a more 'normalized' year with growth in the 20% plus vicinity against tough comps with a gradual upward bias to Gross Margins driven by increasing security-driven transactions."
    | Dec. 30, 2015, 5:43 PM
  • Dec. 10, 2015, 2:11 PM
    • Ciena (CIEN -16.8%) has tumbled after issuing light FQ1 guidance to go with an FQ4 beat. In addition, the optical networking hardware vendor has guided for 8%-9% FY16 (ends Oct. '16) revenue growth, below a 13.8% consensus.
    • With Ciena's outlook raising new fears about telecom capex (under pressure for a while), rival Infinera (INFN -3.3%) is also off, as are optical component vendors Lumentum (LITE -2.2%) and Alliance Fiber (AFOP -1.9%), VoIP/4G signaling infrastructure provider Sonus (SONS -1.6%), and network test equipment/software provider Viavi (VIAV -2%). The Nasdaq is up 0.7%.
    • Northland Securities' Tim Savageaux has gone contrarian and upgraded Ciena to Outperform. He notes the company's FY16 outlook still implies an acceleration in organic sales growth (accounts for the Cyan acquisition) to over 7% from FY15's 3%, and calls the selloff an attractive entry point for buying an industry leader.
    • Wells Fargo's Jess Lubert (Outperform rating) is also defending Ciena. "While we are disappointed by Ciena’s FQ1 and F2016 outlook, we sense the company’s forecast likely embeds conservative assumptions surrounding the Cyan business and the timing of revenue recognition on several large opportunities. That said, with Ciena having secured 100G metro deployments with many of the world’s largest carriers and likely to see improved mix further benefit margins, we remain positive regarding the company’s 2016/2017 prospects and see the potential for the current forecast to prove conservative if execution remains strong."
    • Earnings/guidance details: Ciena's FY16 op. margin is expected to be in a range of 11%-12% vs. 10.9% in FY15 before rising to ~15% in the next 3-4 years. Gross margin (non-GAAP) is expected to be in the mid-40s; it was at 44.9% in FQ4, -40 bps Q/Q and +700 bps Y/Y.

      The company had two 10%+ customers in FQ4 (possibly AT&T and Verizon) that collectively made up 29.6% of revenue. Non-U.S. customers were 34.5% of revenue, and Cyan contributed $84.4M (12% of total revenue), primarily via its Z-Wave packet-optical (integrated optical networking/Ethernet switching) platform. Altogether, packet-optical products made up 70% of revenue, packet networking (Ethernet switches) 9.2%, optical transport 2.4%, and software/services 18.4%. (earnings release)
    | Dec. 10, 2015, 2:11 PM
  • Oct. 28, 2015, 1:42 PM
    • Optical component vendors NeoPhotonics (NPTN +12.6%), Oclaro (OCLR +9.4%), Viavi (VIAV +6.9%), Finisar (FNSR +3.8%), Alliance Fiber (AFOP +4%), and Fabrinet (FN +3.1%) are rallying after optical transport hardware vendor Infinera (INFN +14.6%) beat Q3 estimates and issued strong Q4 guidance. Infinera rival Ciena (CIEN +3.4%) hit yesterday by a bearish Off Wall Street report, is also doing well.
    • For Oclaro, the shoe is now on the other foot: Infinera rallied last week after Oclaro pre-announced strong calendar Q3 sales.
    • On the earnings call (transcript), CEO Tom Fallon stated Infinera saw "a substantive increase" in sales of its Cloud Xpress data center interconnect platform. Cloud Xpress customers now stand at 14 (up from 12 as of July), and growing machine-to-machine traffic within data centers is expected to boost demand for 100G interfaces. Infinera's core long-haul system sales were also healthy.
    • Fallon did admit Infinera is seeing "some conflicting signals" regarding market demand. "On one hand, we are seeing some pockets of slightly softening demand. On the other, we're seeing positive indications in the industry, such as lead-times extending for optical components and continued capacity expansion from cloud providers." The optical component remarks might be contributing to today's rally in component makers.
    • Needham's Alex Henderson, who upgraded Infinera earlier this month, is reiterating a Buy rating today. "Infinera reported a strong quarter and offered a strong guide in its first quarter with Transmode partially in the base and fully in the CY4Q guidance. Negative commentary on the Street on INFN and CIEN regarding industry price pressure has set-up a solid entry point and we expect investors will take advantage of this recent weakness."
    | Oct. 28, 2015, 1:42 PM
  • Oct. 28, 2015, 9:12 AM
    | Oct. 28, 2015, 9:12 AM
  • Oct. 27, 2015, 5:46 PM
    • In addition to beating Q3 estimates, Infinera (NASDAQ:INFN) has guided on its earnings call for Q4 revenue of $258M (+/- $5M) and EPS of $0.21 (+/- $0.02), favorable to a consensus of $250M and $0.19.
    • Gross margin is expected to be at 47% (+/- 100 bps) after coming in at 47.5% (+10 bps Q/Q and +330 bps Y/Y) in Q3.
    • Q3 results include Transmode's numbers from Aug. 20 onward. CEO Tom Fallon: "Our excellent [Q3] results reflect continued strength across our core business, including growing Cloud Xpress revenues as well as the initial contribution from the new metro business. Adding the recently announced metro core and long haul interconnect products along with Transmode's suite of metro solutions enables Infinera to further enhance the superior experience we deliver to our customers."
    • Shares have jumped to $20.20 after hours. They sold off earlier this month following Infinera's analyst day.
    • Q3 results, PR
    | Oct. 27, 2015, 5:46 PM
  • Oct. 27, 2015, 5:41 PM
    | Oct. 27, 2015, 5:41 PM
  • Oct. 27, 2015, 4:21 PM
    • Infinera (NASDAQ:INFN): Q3 EPS of $0.22 beats by $0.05.
    • Revenue of $233.2M (+12.5% Y/Y) beats by $8.15M.
    • Shares +1.9%.
    | Oct. 27, 2015, 4:21 PM
  • Oct. 26, 2015, 5:35 PM
  • Oct. 22, 2015, 3:57 PM
    • Infinera (NASDAQ:INFN) has been a tech standout today after optical component vendor Oclaro pre-announced above-consensus calendar Q3 sales, while stating it saw "strong growth in our 100G product portfolio" and better-than-expected 10G/40G sales. The Nasdaq is up 1.5%.
    • Infinera's Q3 report arrives on Oct. 27. 100G upgrades have been a major tailwind for the company's long-haul optical transport system sales. A 100G product line refresh (covered both metro and long-haul products) was announced earlier this month.
    | Oct. 22, 2015, 3:57 PM
  • Oct. 7, 2015, 11:23 AM
    • Though it opened nearly flat, Infinera (NASDAQ:INFN) has since nosedived on volume of 2.6M shares, well above a 3-month daily average of 1.8M.
    • The selloff comes after the optical networking hardware vendor hosted its analyst day yesterday (webcast), during which it unveiled a product line refresh that included new DTN-X optical transport systems and an end-to-end metro/long-haul solution. William Blair and Needham have respectively reiterated Outperform and Hold ratings.
    | Oct. 7, 2015, 11:23 AM | 2 Comments
  • Oct. 6, 2015, 6:33 PM
    • With Infinera's (NASDAQ:INFN) $300M+ acquisition of Swedish optical networking peer Transmode on the books, the company has rolled out an end-to-end solution pairing Infinera's bread-and-butter DTN-X long-haul optical transport systems with Transmode's TM-series packet-optical (integrated Ethernet/IP and optical networking) metro systems. The solution is enabled by new 100G modules for the DTN-X line that communicate with Transmode's gear.
    • Infinera, which (unlike Transmode) has historically received the lion's share of its revenue from the long-haul market, has also unveiled two metro DTN-X platforms - the XTC-2 and XTC-2E - that combine 100G WDM transport with OTN switching in a metro-friendly footprint. Infinera's next-gen oPIC-100 photonic integrated circuit (PIC) is leveraged.
    • Also launching: A new long-haul DTN-X platform (the XT-500) that uses the company's 500Gb/s PIC-500 PIC and supports the company's Instant Bandwidth rapid-provisioning solution.
    • IHS' Andrew Schmitt: "Infinera can now address the entire WDM market - which we expect to top $15 billion by 2019 -- from the edge to the core and across both traditional service provider and internet content provider applications. Infinera and the DTN-X played a major role in the optical reboot from 10 Gb/s to 100 Gb/s in the long-haul core, and the company is well timed to enter the metro portion of the market, which we expect to surge in 2016,"
    | Oct. 6, 2015, 6:33 PM
  • Sep. 11, 2015, 12:45 PM
    • Finisar (FNSR -18.4%) has plunged to its lowest levels since 2012 after missing FQ1 estimates, providing soft FQ2 guidance, and announcing chairman Jerry Rawls is replacing Eitan Gertel as CEO.
    • Optical component/module peers Alliance Fiber (AFOP -4.6%), Lumentum (LITE -2.3%), and Oclaro (OCLR -6%) are also off, as are equipment vendors Infinera (INFN -3.8%), Ciena (CIEN -2.8%), Adtran (ADTN -2.3%), and Calix (CALX -2.5%). The Nasdaq is nearly flat.
    • During Finisar's earnings call (transcript), Rawls noted his company continues to "see a high level of competition," and is aiming to cut operating expenses to ~20% of revenue from FQ1's 21.8%. CFO Kurt Adzema mentioned wireless and legacy 100G datacom component sales were soft in FQ1, and that Finisar is now seeing "some lumpiness" for 40G data center sales.
    • Adzema insisted the competition (much of it around low-end/10G products) is business as usual. "The lower end products always [face] competition from non-tier 1 companies and in some period of time, it just takes whether it’s a one year or a three year or whatever the period, tier 2 competitors always catch up." Rawls promised 25G/100G Ethernet data center upgrade cycles would drive growth next year.
    • MKM and B. Riley have downgraded Finisar to Neutral, and several other firms have cut targets. MKM's Michael Genovese cites datacom competition/price pressure, and states he's "becoming less convinced that there is an easy path to industry consolidation that will help alleviate ... significant Optical component industry challenges,"
    • At the same time, Genovese defends Ciena, Infinera, and Lumentum (formerly JDS Uniphase's component unit). "Ciena and Infinera actually slightly benefit from more [component] competition and lower prices since they are customers ... we believe the negative revisions in Finisar's outlook are much more on the Datacom side than on the Telecom side ... Finisar is an incumbent that derives 75% of overall revenues from Datacom, while Lumentum is a relatively new challenger with only 20% of revenues from Datacom ... we are much more confident in the demand and pricing environments for 100G Telecom (Metro and [long-haul]) components than we are for Datacom, and Lumentum has significantly more exposure to 100G Telecom than Finisar."
     
    | Sep. 11, 2015, 12:45 PM
  • Sep. 8, 2015, 10:03 AM
    • 5 months after downgrading to Neutral and 8 months after pulling the company from its Conviction Buy list, Goldman has downgraded Infinera (NASDAQ:INFN) to Sell, and cut its target by $5 to $19. Shares are selling off in the face of a 2% Nasdaq gain.
    • Infinera remains up 39% YTD. The optical networking/switching hardware firm trades for 22x a 2016 EPS consensus of $0.95. 2015 and 2016 revenue growth consensus estimates are respectively at 28.1% and 24.6%.
    • Update (11:15AM ET): Goldman's Doug Clark thinks gross margin will be flat to down next year due to metro, Cloud Xpress, and Transmode product ramps, leaving it 200bps below consensus estimates. "We believe Infinera remains well positioned to enter the 100G metro market, which will double its TAM and should support double digit revenue growth through at least 2017."
    | Sep. 8, 2015, 10:03 AM | 8 Comments
  • Sep. 4, 2015, 9:28 AM
    • Deutsche has downgraded Ciena (NYSE:CIEN) to Hold after the company posted mixed FQ3 results. Shares have dropped to $22.46 premarket. Nasdaq futures are off 1.4%.
    • Several firms provided positive reactions yesterday. Wells Fargo's Jess Lubert (Outperform rating): "With Ciena having secured 100G metro deployments with many of the world’s largest carriers and likely to see improved mix further benefit margins, we remain confident in the company’s ability to deliver C2016 EPS of at least $1.70 following FQ3 results. As such, we would recommend investors take advantage of any weakness on Ciena’s softer than expected FQ3 sales results to buy the stock, which we believe remains attractively valued at less than 14X our C2016 EPS estimate."
    • Prior Ciena coverage
    • Update: Deutsche's Brian Modoff states checks point to weak U.S. telco and cable demand. "Our latest round of channel checks correlate well with color we gathered from our post call with CIEN on the potential for modest headwinds to carrier network upgrade activity at the US telcos and cablecos (outside of T; where CIEN is seeing strength in 100G metro and in broadband fiber access). Infinera (NASDAQ:INFN), we note, has revenue exposure at the major Web 2.0 and Cloud portals, ISPs, Telcos such as CenturyLink and a handful of cablecos, and “zero” exposure currently at T, Verizon Communications, etc. We therefore prefer INFN to play the double-digit intensity in 100G Datacenter Optical rollouts and 100G in the Metro and Long Haul during 2H15 and into FY16/17
    | Sep. 4, 2015, 9:28 AM
Company Description
Infinera Corp. engages in the provision of digital optical networking systems to telecommunication carriers. It operates through the following geographical segments: Americas; Europe Middle East and Africa; and Asia Pacific. Its products include data transfer network and aeronautical... More
Sector: Technology
Industry: Communication Equipment
Country: United States