Ciena Corp (NYSE:CIEN) stock gave up its Thursday gains despite Wall Street analysts boosting their price forecasts on the stock.
It delivered a standout fourth-quarter result and issued upbeat guidance that points to accelerating growth in 2026.
Rosenblatt analyst Mike Genovese maintained Ciena with a Buy rating and raised the price forecast from $175 to $305.
Also Read: AI Demand Fuels Ciena Growth, CEO Sees Strong 2026 Momentum
Strong Q4 Performance And Expanding Backlog
Genovese said Ciena closed fiscal fourth-quarter 2025 with strong execution and momentum, beating expectations across revenue, margins, and earnings.
Fourth-quarter revenue rose 20% year-over-year and 11% sequentially to $1.35 billion, about $70 million (5%) above the analyst's estimate.
Gross margins expanded to 43.4%, 150 basis points higher quarter-over-quarter and 80 basis points above the firm's model.
The adjusted EPS of $0.91 topped the $0.74 estimate by 28%, he noted.
For the full year, Ciena booked $4.77 billion in revenue, $7.8 billion in orders, and exited fiscal 2025 with roughly $5 billion of backlog versus $2.1 billion a year earlier, he added.
Robust FY26 Guidance And Margin Expectations
Genovese noted Ciena guided first-quarter 2026 revenue to about $1.39 billion, up sequentially and roughly 30% year-over-year, some $140 million (11%) ahead of consensus.
Management also raised fiscal 2026 revenue growth guidance to 20%–28%, exceeding the analyst's prior preview.
Ciena flagged first-quarter gross margins near 43.5% and warned of a 2Q26 dip driven by increased 800ZR revenue for scale-across work. Management expects 800ZR and company margins to improve in the second half of 2026 as pricing, volumes, and cost reductions kick in, he noted.
Ciena lifted its fiscal 2026 operating margin target to 17% (from 16%), backed by top-line growth, flat opex year-over-year, and improving second-half margins, Genovese pointed out.
The analyst materially raised its earnings outlook, boosting fiscal 2026 EPS to $5.25 (from $4.25) and introducing a fiscal 2027 EPS of $6.78.
He cautioned that his fiscal 2027 numbers remain conservative, modeled on 20% revenue growth and sub-44% gross margins.
The upside scenarios with 30%+ revenue growth and low-20s operating margins could push earnings $10–$12 higher, he added.
On the scale-across opportunity, Genovese emphasized Ciena's leadership.
The analyst said Ciena should capture nearly 100% of line systems for scale-across in fiscal 2026, given its unique Hyper Rail/Multi Rail technology, and expects Ciena to dominate the 800ZR pluggable market for that use case (while sharing some business with Cisco Systems, Inc. (NASDAQ: CSCO) and Nokia Corp (NYSE:NOK)).
Initial scale-across deployments began in the fourth quarter of 2025, and he estimates dozens of such projects in fiscal 2026, each offering high tens of millions to low hundreds of millions in revenue, depending on distance, capacity, and pluggable share.
CIEN Price Action: Ciena shares were down 10.31% at $217.39 at the time of publication on Friday, according to Benzinga Pro data.
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