You Don't Want To Miss On Ciena

Summary

• Ciena has a significant market position in the network products market and has delivered strong top-line growth for a good period of time.
• The firm’s core strategies are aligned with the long term technological shifts in the network industry and reflect a truly market-oriented approach.
• Detailed and segment based targets reflect the core strengths of its product portfolios and also indicate a solid game plan.
• Financial health looks good, debt portion of the capital structure has drastically declined over the years.
• Multiple factors indicate that the firm is undervalued in the market; stats suggest that Ciena has a relatively lower-risk profile.

Investment Thesis

Ciena (NYSE:CIEN) develops high-capacity Networking Platform products that enable the transport, switching, aggregation, service delivery and management of video, data and voice traffic on communications networks. The firm's President and CEO is a long-time industry veteran Gary Smith who is also a member of the President's National Security Telecommunications Advisory Committee. In the last five years, Ciena’s revenue has delivered 8.24% cagr and has made its name as a major player in the industry. Ciena’s core customers include communication service providers, web-scale providers, cable and multi-service operators, submarine network operators, Government and RE (research & education). This year the firm is expecting a 13%-14% revenue growth, given the current industry fundamentals of the industry and the firm’s strong position in it, the guidance is highly achievable. Combining all the factors, Ciena is a buy.

Source: Seeking Alpha

A set of Market-Oriented Core Strategies

The first and probably the most important product-side strategy for Ciena is to promote its adaptive network that leverages its WaveLogic coherent modem technology, enhanced IP capabilities in access and aggregation networks along with software control and automation capabilities. Ciena’s infrastructure delivers advanced network telemetry and enables the tuning of network capacity and speeds to meet changing needs. The firm is also introducing solutions with enhanced IP capabilities to help network operators make better-operating decisions and to optimize their network performance and deliver a better user experience. Right now Ciena remains on track to deliver single wavelength 800 gig systems later this year, which operate under its WaveLogic 5 program.

Source: Company Website

Next is its Blue Planet Automation Software, which is designed to automate, orchestrate and manage both physical and virtual network resources and their associated services across data centers and the wide-area network (WAN). Blue Planet can transform legacy networks into “service ready” networks,

Analyst’s Disclosure:I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.