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Stock Alert (CIEN): Ciena Shares To Test Highs Again?

Shares of Ciena Corp. (CIEN) touched an intra-day high of $43.29 today, not far from its multi-year high of $46.78 reached in late July. However, the trading volume seems thinned out to 771K shares vs. average trading volume of 2.8 million.

On December 6, an analyst urged shareholders to sell Ciena shares, citing a downturn ahead. Perversely, the stock has been climbing ever since, and gained more than 20% from the December 6 closing price of $35.

Mid December, the optical networking company posted a mixed bag of Q4 results, with adjusted eps of 58 cents failing to meet the Street estimate of 63 cents, while revenues were $968 million vs. $964.3 million consensus.

For Q1, Ciena sees revenue of $805 million to $835 million vs. current consensus $819.8 million. Revenue expectation for 2020 aligns closely with the current consensus of approximately $3.8 billion, the company said in its recent earnings call. Ciena continues to target 20% growth in EPS over the next three years.

With WaveLogic 5, Ciena's next-generation coherent optical modem, hitting the market in Q1, the company continues to expect revenue momentum to begin in Q2 with more material revenue in the second half of 2020.

Ciena believes that the recent Centina acquisition rounds out its software capabilities to enable closed-loop automation and positions it for even greater opportunities heading in 2020. Centina provides service assurance analytics and network performance management solutions.

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