Cisco, Ciena and Infinera have carved out a sizable niche in the disaggregated WDM systems market for data center interconnect applications, commanding a combined 85% share. Nonetheless, "you will be hearing this from our competitors, peers and even customers, frankly." That's the good news. Ciena's main competitors include ADTRAN, Aviat Networks, ADVA Optical Networking, Zayo, Juniper Networks and Comtech Telecommunications. Ciena Corporation (NYSE:CIEN) reported its third-quarter earnings this morning and beat analyst estimates handily, earning $1.06 per share (adjusted), versus the Street consensus expectation of $0.83. As a result, analysts expect Ciena's revenue to rise 7% to $2.79 billion this year, and for its non-GAAP earnings to rise 27% to $1.75 per share. But amid all that competition, Ciena's gross margins held up better than Infinera's thanks to its better diversified business, which relies less on cyclical boosts: I personally wouldn't buy either stock today since there are more stable income-generating ways to play infrastructure upgrades via telcos or networking equipment companies. Ciena has 6,383 employees and is ranked 14th among it's top 10 competitors. Drive down cost per bit and reduce energy consumption with Ciena’s high-performance WaveLogic TM coherent technology, built into the Waveserver family. And Ciena (NASDAQ:CIEN, news, filings) chimed in with a win at Ciena (NASDAQ:CIEN, news, filings). Ciena's P/S ratio of 1.3 is also below the industry average. When it comes to optical networking products, we have reached the stage in which the same can be said for Ciena, although we believe it has come about despite its top leadership. Cisco, Coriant, and Infinera each garnered 36 … Digging into market specifics, Ciena was deemed the top data center interconnection (DCI) vendor by 39 percent of those surveyed. Level 3 to may spurn Huawei and sign a three-year deal with Infinera or Ciena. Clark has a $13.50 price target on the stock. WaveLogic 5 will support 800-Gbps coherent transmission and come in two versions. Infinera Corporation is a Sunnyvale, California-based vertically integrated manufacturer of Wavelength division multiplexing (WDM)-based packet optical transmission equipment and IP transport technologies for the telecommunications service provider market. Infinera's biggest challenge over the past year has been sluggish demand for long-haul WDM solutions. Infinera (NASDAQ: INFN) and Ciena (NYSE: CIEN) were both market laggards this year, with the former staying nearly flat and the latter dropping. Infinera expects its revenue to rise about 37% this year to $1.3 billion, but it trades at just 0.6 times that figure. These systems allow telcos and other companies to boost the capacity of their long-distance networks without laying down additional fiber. The CEO commented further that it looks like telecom equipment spending was "somewhat front-end loaded in the calendar year, resulting in lower orders in our third quarter," and implying that total growth in spending on optical equipment this year will be at best in the "low single digits," and at worst, "flat.". But if I had to buy one, it would definitely be Ciena. Infinera vs. Ciena: Who Will Win the Multimillion-Dollar Deal With Level 3 Communications? Let's take a closer at the two companies' core businesses, growth trajectories, and headwinds to find out. That's the bad news for Ciena. Follow him on Twitter for more updates! We are continually improving the user experience for everyone and applying the relevant accessibility standards. A commonly heard phrase over the years has been that nobody gets fired for buying from Cisco Systems. That's why any bid would need to … Now here's the bad: Guidance at Ciena was exceptionally weak, and that weak guidance is destroying Ciena stock in morning trading. Ciena trades at 23 times earnings, which is much lower than the industry average P/E of 33. Ciena has a consensus price target of $56.6765, suggesting a potential upside of 7.08%. Both Infinera and Ciena are exposed to rising competition from cheaper players in China, like Huawei and ZTE, and nimbler rivals like Acacia Communications, which provides smaller, denser, and more power-efficient chipsets than many of its competitors. "And everyone will be talking about this over the next several quarters.". However, Infinera expects cyclical demand for long haul WDM to gradually rebound, and analysts expect its revenue to rise 15% and for its loss to narrow next year. Indeed, it seems everyone is already talking about it today -- and selling because of it, too. Infinera on Nov. 6 missed on both third-quarter revenue and December quarter guidance. … Within the public-company domain, we view the Optical Systems companies Ciena (ticker: CIEN) (rated at Buy, $29 price target) and Infinera (INFN) … ... Mer Telemanagement Solutions vs. Infinera Stock. Ciena also competes against Acacia Communications . As already mentioned, the headline numbers were good. Their 6500 platform is being used to bring 100G to more than 50 metro networks around the US as well as in select international cities. As of 10:15 a.m. EDT, Ciena stock is down a staggering 24%, and fellow networking equipment industry players Infinera (NASDAQ:INFN), Lumentum Holdings (NASDAQ:LITE), and II-VI Incorporated (NASDAQ:IIVI) are falling in tandem, down 16.3%, 11%, and 9.1%, respectively. The top 10 competitors in Ciena's competitive set are Huawei, Nokia, Cisco, Juniper Networks, ZTE, Infinera, ADVA Optical Networking SE, Acacia Communications, Inc., Ntt Electronics. "Upper management" was the most mentioned Con at Infinera. Returns as of 01/14/2021. Power efficiency. Infinera , one Ciena rival, has been struggling. Why Ciena Stock Just Crashed 23% -- and Took Infinera, Lumentum, and II-VI Down With It Ciena sneezes, and everyone else in networking equipment gets a cold. Infinera, Extreme, Viavi selloffs yesterday overdone, says B. Riley FBR 09/04/20 Morgan Stanley Ciena price target lowered to $46 from $50 at Morgan Stanley 08/17/20 Fly Intel: Top five analyst upgrades 08/17/20 Stifel Infinera upgraded to Buy from Hold at Stifel Ciena (NYSE: CIEN) has unveiled WaveLogic 5, new iterations of its WaveLogic coherent engine ASIC. Infinera's lack of profitability stands in stark contrast to Ciena, which just posted a great quarter. Infinera doesn't have a P/E ratio since it wasn't profitable over the past year. Sales grew 2% in Q3 despite the coronavirus, rising to $976.7 million, which was better than the $971.8 million that analysts had predicted. Infinera’s Optical Innovation Center is a highly vertically integrated organization that employs a world-class team of scientists and engineers who take innovative solutions from conception to development to production. Ciena had 82 more reviews than Infinera that mentioned "Work life balance" as a Pro. Leo is a tech and consumer goods specialist who has covered the crossroads of Wall Street and Silicon Valley since 2012. CenturyLink is using Infinera in the longhaul, but Ciena … CEO Gary Smith warned investors on the company's post-earnings conference call that Ciena suffered "a meaningful ... broad-based ... slowdown in orders" late in Q3. Its forward P/E of 11 is even lower, indicating that it's cheap relative to its growth potential. For 2018, analysts see Ciena's revenue and earnings respectively rising 6% and 17% -- so it clearly has steadier growth than Infinera. Ciena has a more diversified business. Its services unit offers deployment, consulting, and maintenance services, while its software helps companies monitor their networks. Last quarter, 81% of its revenue came from networking platforms, 13% came from services, and the remaining 6% came from software solutions. Infinera mostly provides long-haul wave division multiplexing (WDM) and subsea optical transmission systems. Stock Advisor launched in February of 2002. "We believe this [slowdown] is very broad," he continued. Ciena has a better diversified business, decent top and bottom line growth, and lower valuations. While both Infinera and its archrival continue to benefit greatly from the US government protection from Chinese competition, … Infinera's lack of profitability stands in stark contrast to Ciena, which just posted a great quarter. So what did Ciena say to cause so much consternation on Wall Street? Market data powered by FactSet and Web Financial Group. Global Optical Transport Network Equipment Market 2017-2021 with Ciena, Cisco, Coriant, Fujitsu, Huawei Technologies, Infinera, Nokia & ZTE Dominating News provided by Research and Markets Both optical transport solution providers were cited as turnaround plays on the "super cycle" in fiber upgrades -- fueled by the surging use of cloud services, streaming media, and other data-intensive tasks -- yet they failed to impress investors. Ciena has fared better with its diversified exposure to fiber optic components, software suites, and transport solutions for the metro and DCI markets. On the bottom line, analysts expect a non-GAAP loss of $0.56 per share this year, compared to a profit of $0.34 in 2016. Accordingly, Ciena management now forecasts fourth-quarter revenue of only $800 million to $840 million, versus analyst estimates of nearly $1 billion, according to a report by TheFly.com. Summary At the same time, traditional service providers such as Verizon are expanding advanced … Its price-to-sales ratio of 1.7 merely matches the industry average for communication equipment makers. Learn more. Smith noted that amid the slowdown in spending, Ciena has "gained share, significant share" over its competition. Cumulative Growth of a $10,000 Investment in Stock Advisor, Why Ciena Stock Just Crashed 23% -- and Took Infinera, Lumentum, and II-VI Down With It @themotleyfool #stocks $IIVI $INFN $CIEN $LITE, Why Investors Need to Look Past Ciena's Near-Term Troubles, CIENA Corp (CIEN) Q4 2020 Earnings Call Transcript, 4 Reasons to Buy Infinera Stock After Its Q3 Earnings Beat, Infinera (INFN) Q3 2020 Earnings Call Transcript, Copyright, Trademark and Patent Information. His wheelhouse includes cloud, IoT, analytics, telecom, and gaming related businesses. Given Ciena's higher possible upside, analysts plainly believe Ciena is more favorable than Mer Telemanagement Solutions. Given Ciena's stronger consensus rating and higher probable upside, analysts clearly believe Ciena is more favorable than Infinera. And when quizzed by analysts on the earnings call as to why rivals like Infinera, Lumentum, and II-VI have not reported a similar slowdown in sales, Ciena's response was downright ominous: "We have a quarter that's slightly off in terms of most of our peers, competitors and customers," he said, and for this reason the slowdown in sales "might not have been evident to [competitors] at the time they did their earnings." Ciena is committed to ensuring digital accessibility for people with disabilities. In addition to selling optical transport solutions, it sells converged packet optical hardware, packet networking equipment, services, and software. Ciena has a consensus target price of $56.6765, indicating a potential upside of 7.08%. Cumulative Growth of a $10,000 Investment in Stock Advisor, Better Buy: Infinera Corporation vs. Ciena Corporation @themotleyfool #stocks $INFN $CIEN $VZ $ACIA, Why Investors Need to Look Past Ciena's Near-Term Troubles, CIENA Corp (CIEN) Q4 2020 Earnings Call Transcript, 4 Reasons to Buy Infinera Stock After Its Q3 Earnings Beat, Infinera (INFN) Q3 2020 Earnings Call Transcript, Copyright, Trademark and Patent Information. Density. Now here's where it gets worse for everybody else: Ciena's troubles, it seems, are not limited to Ciena -- in fact, the opposite may be true. White Paper. Infinera also sells metro and DCI (data center interconnect) solutions, which improve connections over shorter distances. Together they have raised over 10.1B between their estimated 1.2M employees. Infinera currently has a consensus price target of $8.5769, suggesting a potential downside of 6.77%. Infinera (NASDAQ:INFN) and Ciena (NYSE:CIEN) were both market laggards this year, with the former staying nearly flat and the latter dropping almost 10%. Ciena had 37 more reviews than Infinera that mentioned "Work environment" as a Pro. That makes it a smarter play than Infinera, which is weighed down by its lack of profitability, sluggish long haul WDM business, and a lack of competitive advantages against its metro and DCI competitors. Analysts say Ciena has been gaining share versus rival Infinera . Two possible take-out targets, Ciena and Infinera () are trading down fractionally in pre-market trading, while a third, Juniper Networks is up 13 cents at $24.12. Ciena also benefited from Verizon's 100G metro rollout in the US and a similar deal with Tata Communications in India. Ciena Corp. (NYSE: CIEN) -- arguably the packet-optical numero uno, looking strong and currently on one of its occasional growth spurts. However, contrarian investors might be wondering if either stock could rebound later this year. Infinera’s optical transport and ROADM solutions are designed and built to ensure maximum efficiency across the network to reduce operating costs and maximize asset utilization. It is a pioneer in design and manufacture of large-scale photonic integrated circuits (PICs).. Telcos and other customers are currently investing more heavily in shorter range metro and DCI solutions, and Infinera generates much less revenue from those newer businesses. Infinera forecast earnings in a range of a 5-cent loss to a 2-cent profit vs. estimates of a 6-cent loss. As a result, Infinera posted double-digit annual revenue declines for four straight quarters, and analysts expect its revenue to drop 14% to $750 million this year. Maximizing the Capacity-Reach of 800G Coherent. The revenue from the system must be nearing its peak – in fact Ciena long ago shut down the entire site originally responsible for the product (they are now at Infinera). Pro forma earnings eclipsed estimates, and the company's profits as calculated according to generally accepted accounting principles (GAAP) jumped 65% year over year to $0.91. We are continually improving the user experience for everyone and applying the relevant accessibility standards. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Ciena is committed to ensuring digital accessibility for people with disabilities. Unprecedented capacity. Returns as of 01/14/2021. Ensure all network links are running efficiently with highly tunable coherent optics, supporting single wavelength line rates as high as 800 Gb/s. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. The problem was with guidance. Ciena, Cisco, and Infinera are the dominant suppliers for this sector. At risk of losing U.S. partnerships, Level 3 Communications may soon strike a multimillion-dollar, three-year optical networking deal with Infinera or Ciena . "Work life balance" was the most mentioned Con at Ciena. In Asia, Ciena has fared well versus China's Huawei. Financial analysts have expressed concern regarding Infinera’s integration of its newly acquired Coriant assets. Stock Advisor launched in February of 2002. Ciena has a better diversified business, decent top and bottom line growth, and lower valuations. Ciena and Infinera make system-level optical products. Ciena shares are down 10 cents at $23.64 following the downgrade. 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