The firm cited strong second quarter earnings, which beat analysts' estimates.
Last week, the global supplier of telecommunications networking equipment, software and services reported revenue of $621.9 million, or 35 cents per share for the second quarter of 2015, compared to revenue of $560.06 million, or 17 cents per share, in the same quarter last year.
Analysts at Citigroup expected the company to report revenue of $615 million, or 30 cents per share this quarter.
The firm raised its price target "taking into account Ciena's mid to high single digit rev growth balanced by potential margin improvement," according to the analyst note.
On Friday, shares closed at $25.
Separately, 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 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 has favored debt over equity in the management of its balance sheet."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 0.9%. Since the same quarter one year prior, revenues rose by 11.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 270.00% and other important driving factors, this stock has surged by 29.75% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- Compared to other companies in the Communications Equipment industry and the overall market, CIENA CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- 42.05% is the gross profit margin for CIENA CORP which we consider to be strong. Regardless of CIEN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CIEN's net profit margin of 3.32% is significantly lower than the industry average.
- The debt-to-equity ratio is very high at 9.22 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, CIEN has managed to keep a strong quick ratio of 2.23, which demonstrates the ability to cover short-term cash needs.
- You can view the full analysis from the report here: CIEN Ratings Report