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For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Ciena (CIEN) ten years ago? It may not have been easy to hold on to CIEN for all that time, but if you did, how much would your investment be worth today?
Ciena's Business In-Depth
With that in mind, let's take a look at Ciena's main business drivers.
Founded in 1992 and headquartered in Hanover, MD, Ciena Corporation is a leading provider of optical networking equipment, software and services.
The company classifies its reporting segments into — Networking Platforms (76.4% of total revenues in second-quarter fiscal 2021); Platform Software and Services (6.8%); Blue Planet Automation Software and Services (2.9%); and Global Services (13.9%).
Networking Platforms comprise the following:
The Converged Packet-Optical segment includes networking solutions optimized for the convergence of coherent optical transport, Optical Transport Network (OTN) switching and packet switching. Its principal products include the 6500 packet-optical platform, CoreDirector multiservice optical switches, 5430 reconfigurable switching system and OTN configuration for the 5410 reconfigurable switching system.
The Packet Networking segment includes the 3000 family of service delivery switches and service aggregation switches, the 5000 series of service aggregation switches and Carrier Ethernet packet configuration for the 5410 service aggregation switch.
The Optical Transport segment includes optical transport solutions that add capacity to core, regional and metro networks and enable cost-effective and efficient transport of voice, video and data traffic at high transmission speeds.
The Software and Services segment includes unified service and network management software facilitating planned network maintenance, outage detection and identification of customers or services affected by network troubles. The segment includes sales of ON-Center Network & Service Management Suite, integrated network and service management software and the Preside and OMEA software platforms acquired from the MEN Business.
Global Services comprises a range of consulting and support services that help customers “design, optimize, deploy, manage and maintain their communications networks”.
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Ciena ten years ago, you're likely feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in June 2011 would be worth $3,333.72, or a 233.37% gain, as of June 17, 2021. Investors should keep in mind that this return excludes dividends but includes price appreciation.
In comparison, the S&P 500 gained 233.19% and the price of gold went up 14.12% over the same time frame.
Analysts are anticipating more upside for CIEN.
Ciena reported healthy second-quarter fiscal 2021 results, wherein the bottom line and the top line beat the Zacks Consensus Estimate. The company is seeing encouraging signs in the market that include improvements in customer spending. Ciena continues to benefit from increased network traffic, demand for bandwidth and the adoption of cloud architectures. It has the largest optical research and development investment capacity in the industry, which enables it to deliver cutting-edge innovation at the best time to market. However, challenging macroeconomic conditions have hampered its order flow, while stiff competition remains a concern. Customer concentration has also impeded the company’s top-line growth. Delays in product development or supply chain might affect its reputation and impair its ability to seize market opportunities.
The stock has jumped 10.87% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 9 higher, for fiscal 2021; the consensus estimate has moved up as well.
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