In terms of reported reports, Ciena (CIEN) isn’t out of the woods yet with respect to the carrier sending slowdown that management announced back in early September 2020, hammering the stock. Still, Wall Street is a forward-looking place, and with the downturn likely ending in FQ2’21 and grow resuming thereafter, I still there are solid reasons for owning Ciena shares.
When I last wrote on Ciena, my conclusion was that the share price weakness following a very negative revision to short-term guidance was a buying opportunity given the meaningful long-term opportunities for Ciena to leverage data traffic growth into higher revenues, margins, and profits.
Since then, the shares have risen about 25%, modestly outperforming the NASDAQ index and its peer group, and regaining much of the ground lost after the September warning. Even with those gains, I believe Ciena shares can continue to outperform on the basis of rebounding spending among Tier 1 North American customers and significant international opportunities.
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