NEW YORK (TheStreet) -- Ciena Corp. (CIEN) is down 8.9% to $21.21 Friday, after it guided its operating margin to be at the low end of the company's 7% to 10% target range for fiscal 2014, ending in October.
Citiigroup (C), which rates the communications equipment company as "neutral," thinks that operating margins around 10% are still far off in the company's future.
"While we have become believers in the sustainability of Ciena's product cycle, op margin expansion seems to still be coming in fits and starts challenging the earnings power of the company and making it difficult to currently argue for more than a 20x P/E on our CY14 $1.24 est."
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TheStreet Ratings team rates CIENA CORP as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate CIENA CORP (CIEN) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."