New Trade for September 3rd, 2020

5G networks will connect to fiber-optic networks for “long haul” purposes.  That will provide reliability for emerging automotive, robotics and medical applications.  Ciena  (CIEN) controls close to a quarter of the optical hardware networking market worldwide (excluding China).

The optical network transport market that was worth just over $23.6 billion in 2019 is expected to hit $56 billion in revenue by 2025, according to Mordor Intelligence.  That translates into a compound annual growth rate of 15.4%, indicating that Ciena could ramp up its current modest pace of revenue growth. 



In the last fiscal quarter the company reported a revenue increase of 3.4% year over year. Considering that only 8% of global telecom networks are expected to be covered by 5G this year.  According to GSMA Intelligence the coverage could go up to 34% by 2025.  So don’t be surprised to see Ciena climb in the forthcoming quarters since we are still in the early stages of 5G deployment.  

CIEN stock is currently trading at a relatively attractive valuation with a trailing price-to-earnings ratio of 29, which is much lower than the 5-year average multiple of 55.  



NEXT:



Get Free Stock Picks via SMS by Signing Up Below!


I would like to receive timely trade ideas and stock watchlists from Wall Street Watchdogs at the phone number provided. Message frequency varies. Message and data rates may apply. Reply HELP for help or STOP to cancel.(Watchdogs SMS Terms of Service & Privacy Policy)