An Ongoing Divergence Between Ciena's Business And The Stock Sentiment Offers An Opportunity

Ciena (NYSE:CIEN) is doing its part. This optical equipment specialist has continued to more than hold its own in its traditional service provider networking market, while also executing well on its opportunities in the data center with webscale customers like Amazon (NASDAQ:AMZN) and Facebook (NASDAQ:FB). What’s more, Ciena has shown it can move the ball forward with respect to technology, staking out a lead with its 400G technology and, now, its 800G technology as well.

And yet, the shares still don’t really reflect that, or at least not on a consistent basis. Ciena shares had drifted back toward $35 before reporting fiscal fourth quarter results (and more encouraging guidance than the Street had expected), but even in the low $40’s, the shares look underpriced based on what investors have normally paid for similar levels of margin. Although 2020 will see a slower pace for the company, I still think these shares are worth serious consideration.

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An Ongoing Divergence Between Ciena's Business And The Stock Sentiment Offers An Opportunity