| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 12 | 78.0x | 17.8x | Bottom tier | |
Growth | 95 | 32.6% | 7.1% | Top tier | |
Quality | 82 | 12.5% | 4.5% | Top tier | |
Safety | 77 | 0.7x | 2.6x | Top tier | |
Capital Return | 24 | — | 2.12% | Bottom tier | |
Momentum | 51 | 217.2% | 2.9% | Around median | |
Sentiment | 49 | 13 | 3 | Around median |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Ciena Corporation operates in high-speed optical connectivity technologies, selling networking systems, modems, pluggable modules, components, software, and services that connect wide-area networks and data centers. Its revenue drivers include the WaveLogic, RLS, and WAV server platforms and interconnect solutions, with usage expanding from traditional networks and data center interconnection to data center scale-out applications driven by AI model training. The company benefits from selling its solutions to cloud service providers and telecommunications operators, as well as customized consumption models that integrate its technology into some customers’ platforms.
In Q3 FY2026, Ciena reported record revenue of approximately $1.7 billion, up 37% year over year, EDGAR-reported gross profit of $759.3 million, net income of $266.4 million, and earnings per share of $1.83. Adjusted gross margin was 46.4%, including a positive nonrecurring impact of approximately 70 basis points from the accounting treatment of a tariff refund, while adjusted operating margin reached a record 22.5%. Adjusted earnings per share were $2.11, up 215% year over year.
The growth mix in Q3 FY2026 was led by the optical business and data center-related demand; total optical networking revenue including interconnect grew by more than 45% year over year, revenue from both RLS and WAV server increased by more than 55%, interconnect revenue more than doubled, and direct revenue from cloud service providers grew by more than 80%. Hyperscalers now represent approximately 50% of Ciena’s direct business, while two customers each contributed more than 10% of quarterly revenue, demonstrating strong demand while also highlighting elevated concentration. On a trailing-twelve-month basis ending in FY2026, revenue was $6.0 billion, gross profit was $2.7 billion, and net income was $654.4 million.
The analyst consensus is “Buy,” with an average price target of $500.5 and a wide range between $350 and $650; the average is below the 52-week high of $637.51, while the highest target is slightly above that peak. No price-to-earnings ratio is displayed, so the valuation rests on accelerating earnings and guidance for growth of at least 30% in FY2027, weighed against customer concentration risks, supply constraints, and the wide range of targets. The $300 gap between the highest and lowest targets indicates meaningful disagreement over how sustainable the repricing accompanying AI-related demand will be.
Figures in the text are as of 2026-09-04; the live price is shown at the top of the page.
Revenue reached approximately $1.7 billion, up 37% year over year, while EDGAR-reported net income reached $266.4 million. The total optical networking business including interconnect grew by more than 45%, and RLS and WAV server revenue increased by more than 55% each. Interconnect revenue also more than doubled, and direct revenue from cloud service providers grew by more than 80%. This mix, together with pricing and cost discipline, helped raise adjusted operating margin to a record 22.5%.
Backlog reached $8.5 billion at the end of Q3 FY2026 after a quarterly increase of $800 million, and management expects it to exceed $10 billion by the end of FY2026. Management stated that the vast majority of the expected backlog carries customer-requested dates in FY2027 and that it covers most of the revenue guidance of $8.3 billion to $8.4 billion. However, Ciena does not have sufficient supply capacity to fulfill all those orders during FY2027. The timing of converting orders into revenue therefore remains tied to component availability, with the supply-demand imbalance expected to persist into 2028.
Automated analysis for informational purposes only — not investment advice.
As of September 3, 2026, WaveLogic 6 Extreme was, according to management, the only high-performance 1.6-terabit modem in the market, and its adoption pace after 18 months had surpassed that of WaveLogic 5 Extreme. RLS Hyper-Rail is the next generation of optical line systems designed to connect distributed AI training workloads across data centers at higher density. The company aims to standardize the product with customers by the end of 2026 and generate hundreds of millions of dollars in revenue during FY2027. Management expects Hyper-Rail margins to be above the company average, making it a potential driver of both revenue and profitability.
Management initially expects revenue between $8.3 billion and $8.4 billion in FY2027, representing growth of at least 30% year over year. It also expects a gross margin between 45% and 46% and an adjusted operating margin between 25% and 27%. Management described the revenue range as a floor that could be exceeded if more components become available, because supply constraints limit the pace of order fulfillment. The company is scheduled to provide an update to this outlook when it reports Q4 FY2026 results in December 2026.
Customer concentration is the foremost risk, as hyperscalers represented approximately 50% of direct business, and two customers each contributed more than 10% of Q3 FY2026 revenue. Component constraints also limit the company’s ability to fulfill orders, and management expects supply and demand not to return to balance before 2028. Adjusted gross margin could decline to approximately 45% in Q4 FY2026 after the previous quarter benefited from 70 nonrecurring basis points related to a tariff refund. Additional factors include the wide range of analyst targets between $350 and $650 and net insider sales of $17.8 million during the three months ended September 1, 2026, although insider sales remain a limited signal because they may be prearranged.
