William Blair Raises Ciena Estimates After Q1 Report, Says Company Has 'Market-Leading' Product Portfolio

Network technology name Ciena Corporation CIEN reported above-consensus adjusted earnings per share and 4-percent year-over-year revenue growth for the first quarter of 2018 on Tuesday. 

The Analyst

William Blair analyst Dmitry Netis reiterated an Outperform rating on Ciena shares. 

The Thesis

Ciena further diversified its customer base, with non-telco accounting for 35 percent of revenue, and direct webscale revenue more than doubling year-over-year to 15 percent of total revenue, Netis said in a Wednesday note.

The company saw better-than-expected order flow, with bookings slightly exceeding estimates and rising backlogs, the analyst said. 

"New customer wins in new territories (such as Japan and South Korea) that have been closed to Ciena in the past are a clear sign of a market-leading product portfolio and market share gains," Netis said. 

Ciena's second-quarter revenue and gross margin guidance were in line with the consensus, Netis said. The tech company reiterated long-term targets of 5-7 percent revenue growth and 14-16 percent earnings per share growth.

William Blair raised its Q2 and fiscal 2018 estimates for Ciena, with the firm continuing to see an attractive risk-reward profile for the stock.

"Strong multiquarter visibility and positive EPS revisions, as previewed, due to a lower non-GAAP tax rate (26 percent versus prior 36-37 percent), should reignite investor interest in the stock," Netis said. 

The Price Action

Ciena shares were down close to 10 percent over the year through Monday. 

Ciena shares rallied 10.1 percent Tuesday after the Q1 report. 

The shares were up 2.57 percent at $26.36 at the time of publication Wednesday afternoon. 

Related Links:

Analyst: Ciena Benefits From Carrier Capex Outlook, Improving Competitive Environment

Jon Najarian Sees Unusual Options Activity In Ciena And Alibaba

Photo courtesy of Ciena. 

Posted In: Dmitry NetisnetworkWilliam BlairAnalyst ColorReiterationAnalyst Ratings

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.