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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Ciena Corporation (XNYS:CIEN) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
CIEN
Name:
CIENA CORPORATION (XNYS:CIEN)
Sector:
- 80215.00K
Industry:
Communication Equipment
CEO:
Mr. Gary Smith
Total Employees:
7,241
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -159.27% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF CIENA CORPORATION(CIEN) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND COMMUNICATION EQUIPMENT INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
44.22
One Month Price Target:
$44.45
Six Month Price Target :
$45.58
Likely Price in One Year's Time:
Ticker:
$46.95
Likely Trading Range Today Under (Normal Volatility)
$44.05
Price Upper limit ($) :
$44.45
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$41.81
This week:
$38.82
This month :
$33.43
Other Primary facts
Market Cap:
6.33B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
148.29M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.64%
-24.32%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$55.41
$50.26
$33.03
$38.18
Medium risk (<10%) entry points
Buy Call
Sell Call
$48.58
Buy Put:
Sell Put:
$47.48
$39.85
$40.96
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
CIEN
Sharpe Ratio:
2.23%
Comparison:
CIEN, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 71.85% higher than the industry
& is -2.26% lower than the market/S&P 500 average
Average Returns/Yield of
CIEN
Daily returns:
0.07%
Weekly returns:
0.34%
Monthly returns:
1.38%
Yearly returns:
12.89%
Comparison of returns:
Average annual returns/yield (last 3 years) is 28.13% above industry average
Classification:
CIEN, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.28
Statistical test of Returns:
CIEN has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.69%
Weekly Volatility:
6.02%
Monthly Volatility:
12.03%
Yearly Volatility:
41.68%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
4.58%
Volatility in last five trading days has been 70.29% above long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.46%
Weekly VaR:
-12.20%
Monthly VaR:
-24.40%
How Much Can the price of
CIEN
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-21%
Worst case (decline):
-84.53%
This translates to price declining to:
$35.03
This translates to price declining to:
$6.84
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
CIEN is a 72.23% riskier investment compared to the market/S&P 500 & is 47.55% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -15.09% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
CIEN
Beta in relation to market/S&P 500--0.92
Expected beta in 1 year's time:
0.646
Expected beta in 3 year's time:
0.913
Unlevered (debt free) Beta:
0.627
Beta in relation to Nasdaq (XNAS):
0.924
Beta in relation to all global stocks::
0.749
Beta Comparison & Analysis
Beta of competitors/peers::
1.292
Beta is -28.90% lower than peers
Average Industry Beta:
1.197
Beta is -23.28% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
17.83%
Sustainable growth rate is -60.98% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.071
Alpha is 360.57% above industry average alpha yield
Alpha is 450% higher than market/& is unsustainably high
Analysis of Cost of Capital of
CIEN
Equity cost of capital:
0.094
Equity cost of capital is -16.82% below industry mean WACC
Unlevered (without debt) cost of capital:
6.45%
Before-tax cost of debt:
1.61%
After-tax cost of debt:
1.27%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.27%
WACC is -12.06% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$25.78
Revenue growth rate per share of (3Y):
2.33
Annual revenue growth rate is -41.01% below industry average
EPS:
$2.73
Expected Annual growth rate of EPS (3Y):
24.29%
Expected future EPS growth rate is 51.77% higher than the Communication Equipment industry
Free cash flow (FCF) per share:
$1.99
-
-
Debt per share
$7.71
EBITDA per share
$3.26
Valuation Analysis Today of
CIEN
P/E Ratio:
34.6
P/E Ratio of Competitors/Peers:
17.71
P/E ratio is 95.34% higher than main peers & is -6.80% lower than the industry
Stock price/value with industry average P/E ratio: $101.35
CIEN is -56.37% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.72
Price to sales ratio is -25.10% below the industry mean
P/B (Price to book value ratio):
2.33
Price to free cash flow: 22.18
Price to free cash flow ratio is -37.80% lower than the industry
Net income growth rate (3Y):
-234.34%
Net income growth rate is -151.40% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
40.64%
Net debt to equity ratio:
2.25%
Debt to assets ratio:
23.35%
Net debt to assets ratio:
1.29%
Debt-to-asset ratio is -57.81% below industry average
Ability to repay debt:
Interest coverage ratio:
25.39
Interest coverage ratio is -30.37% less than industry average
Looking forward:
Debt growth rate:
13.97%
Annual debt growth is -238% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.39%
Analysis of Key Statistics
Correlation of price movement with the market:
0.624
Statistical significance of correlation:
CIEN has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.552
Stock price is 13.13% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.552
Correlation of price movement with Nasdaq (^IXIC):
-0.013
Covariance of price movement with the market:
-0.02
Kurtosis
17.65
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-0.074
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
CIEN
Gross Profit Margin Ratio:
182%
Operating Profit Margin Ratio:
10.58%
Operating profit margin is 64.49% higher than the industry
Net Profit Margin Ratio:
182%
Effective Tax Rate:
-14.29%
Effective tax rate is -151.21% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
15.15%
Return on equity (ROE) is -56.38% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
8.70%
Return on assets (ROA) is 99.30% higher than the industry
Financial Leverage:
1.3x
Current Ratio:
4.16
Current ratio is 87.03% above industry average
Cash Conversion Cycle (days):
38.5
Cash conversion cycle is -38.50% below industry average
The remaining useful life of property plant & equipment is: 6.0 years
Stock based compensation to net income ratio:
5.70%
In-depth Efficiency Analysis
Revenue generated per employee:
528.0K
Each employee generates -4% less revenue than industry average revenue per employee
EBITDA generated per employee:
66.7K
Each employee generates -12% less EBITDA than industry average revenue per employee
Profit generated per employee:
58.9K
Each employee generates 138% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 11.1K
Each employee generates 602% more free cash flow than industry average revenue per employee
Assets/Capital per employee
239.8K
Each employee generates 602% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 1.28%
Growth rate in R&D investment/expenditure is -155.28% lower than the industry
Competitors/Peer firms of
CIEN
ASANA, INC. (XNYS:ASAN)
JUNIPER NETWORKS, INC. (XNYS:JNPR)
SAMSARA INC. (XNYS:IOT)
ZENDESK, INC. (XNYS:ZEN)
FAIR ISAAC CORPORATION (XNYS:FICO)
TD SYNNEX CORPORATION (XNYS:SNX)
Globant SA (XNYS:GLOB)
BLACK KNIGHT, INC. (XNYS:BKI)
Elastic NV (XNYS:ESTC)
Current Analyst Ratings
Strong buy�25%
Buy�46%
Hold�17%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
4/30/22
Revenue:
3.82B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
2.09B
1.74B
601.41M
188.32M
671.69M
483.37M
42.72M
1.32B
963.00K
19.03M
90.92M
483.11M
404.37M
426.48M
373.16M
- 53315.00K
426.48M
Statement of Cash Flow
Date:
Period:
12.23M
Differed Income Tax :
- 766.00K
Stock Based Compensation :
24.30M
Change in Working Capital :
- 157649.00K
Accounts Receivables:
87.22M
Other Working Capital:
10.42M
Other Non-Cash Items:
21.65M
Net Cash Provided by Operating Activities:
- 54411.00K
Investments in PP&E:
- 25804.00K
Net Acquisitions:
- 56036.00K
Purchases of Investments:
- 350465.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
1/29/22
2022
Q1
1.12B
460.37M
1.58B
795.25M
457.60M
332.26M
3.16B
43.34M
322.82M
101.03M
88.64M
799.59M
380.83M
1.74B
-
4.90B
310.11M
37.85M
-
124.96M
287.41M
760.33M
1.14B
120.57M
1.33B
-
2.09B
1.53M
- 3739309.00K
- 14905.0K
6.57B
January 29, 2022 at 7:00:00 AM
3.40B
2.81B
4.90B
549.01M
1.18B
63.2M
50.00M
1.35M
- 380959.00K
- 4506.00K
15.15M
- 250000.00K
-
374.08M
134.72M
- 3259.00K
- 303910.00K
1.12B
1.42B
- 54411.00K
- 25804.00K
- 80215.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
CIEN
2023
2024
2025
2026
2027
$47.18
$78.27
$83.10
$88.23
$93.68