Ciena Shares Slide After Outlook Miss Despite AI-Fueled Beat, Prompting Analyst Upgrades

Overview

• Ciena reported fiscal Q1 revenue of $1.43 billion, up 33% year over year, with adjusted EPS of $1.35 rising 111% as operating margin improved to 13.3% and adjusted operating margin to 17.9%.
• Management raised full-year revenue guidance to $5.9–$6.3 billion and guided Q2 to about $1.5 billion ± $50 million, but the full-year midpoint trailed the roughly $6.99 billion consensus, sending the stock down about 13% Thursday and another 1% premarket Friday.
• Orders surged roughly 141% with a book-to-bill ratio of 2.4x, and the company ended the quarter with a $7 billion backlog that leadership described as historically strong.
• Optical Networking drove the quarter with about $1.02 billion, or roughly 72% of sales, while three customers accounted for 47.4% of revenue; Ciena repurchased about 0.4 million shares for $80.5 million.
• After the sell-off, Bank of America upgraded the stock to Buy with a $355 target, Rosenblatt lifted its target to $350 (Buy), and other targets moved higher at Barclays ($372), Wolfe ($375), Stifel ($320), and Morgan Stanley ($286).