On Friday, Needham maintained a Buy rating on shares of CIENA (NYSE: CIEN) and raised the price target to $95 from the previous $80. The firm's decision followed CIENA's release of its fiscal fourth quarter 2024 results, which showed revenues exceeding consensus forecasts by 2% and earnings per share (EPS) falling $0.11 short.
The stock has shown remarkable momentum, with InvestingPro data revealing a 90.7% return over the past year and currently trading at $84.52, near its 52-week high of $89.25. The company's fiscal year 2025 and long-term revenue guidance, projecting an 8%-11% increase, also surpassed consensus expectations.
CIENA's fourth-quarter performance was notably bolstered by a 50% quarter-over-quarter increase in its Webscale division, attributed to market share gains in the 400ZR segment. However, the quarter's margins were affected by a one-time expense and obsolescence (E&O) charge, which was deemed reasonable by the analyst. The positive outlook for fiscal year 2025 is further supported by rising demand from North American service providers.
The analyst highlighted CIENA's continued market share gains in its core total addressable market (TAM), driven by strong execution, leading technology, and solid customer relationships. While optimistic about the company's main business, the analyst expressed a more cautious view on CIENA's two new product segments.
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In light of CIENA's stock reaching a 20-year high, with a significant 74.8% price return over the past six months, the analyst speculated on the potential attractiveness of mergers and acquisitions, suggesting that Harmonic Inc . (NASDAQ: NASDAQ:HLIT), which also holds a Buy rating, could be an accretive acquisition target for CIENA. The updated price target reflects the firm's revised fiscal year 2025 estimates and the introduction of fiscal year 2026 estimates.
In other recent news, Ciena (NYSE:CIEN) Corporation has been the subject of several analyst adjustments. BofA Securities upgraded the company's shares to Buy from Neutral and raised the price target to $95, citing improved business outlook and increased order momentum. Rosenblatt Securities, while maintaining a Neutral stance, raised its price target to $94 due to Ciena's positive near-term business outlook but expressed caution over potential risks.
Barclays (LON:BARC) kept an Overweight rating on Ciena and increased the price target to $97, following the company's long-term guidance that surpassed analyst expectations. The company has revised its long-term growth forecast from 6-8% to 8-11%.
Raymond (NS:RYMD) James also showed optimism, raising its price target to $91 and maintaining an Outperform rating, following Ciena's fourth-quarter financial report that showcased sales surpassing expectations.
Lastly, B.Riley kept a Buy rating and a $68 price target for Ciena following the company's fourth-quarter earnings report, which showed revenues of $1,124 million and earnings per share of $0.54. The company anticipates a strong order book for fiscal year 2025, buoyed by stabilization in carrier spending. These are among the recent developments for Ciena Corporation.
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