Ciena Corp Profitability Analysis

CIEN Stock  USD 68.17  1.69  2.54%   
Considering Ciena Corp's profitability and operating efficiency indicators, Ciena Corp is performing exceptionally good at this time. It has a great probability to showcase excellent profitability results in December. Profitability indicators assess Ciena Corp's ability to earn profits and add value for shareholders.
 
Net Income  
First Reported
1997-01-31
Previous Quarter
-16.8 M
Current Value
14.2 M
Quarterly Volatility
244.6 M
 
Dot-com Bubble
 
Housing Crash
 
Credit Downgrade
 
Yuan Drop
 
Covid
At this time, Ciena Corp's Sales General And Administrative To Revenue is very stable compared to the past year. As of the 22nd of November 2024, Operating Cash Flow Sales Ratio is likely to grow to 0.15, while Price To Sales Ratio is likely to drop 1.63. At this time, Ciena Corp's Interest Income is very stable compared to the past year. As of the 22nd of November 2024, Change To Netincome is likely to grow to about 203 M, though Accumulated Other Comprehensive Income is likely to grow to (32.3 M).
Current ValueLast YearChange From Last Year 10 Year Trend
Gross Profit Margin0.320.468
Way Down
Pretty Stable
Operating Profit Margin0.140.1379
Fairly Up
Slightly volatile
Return On Equity0.150.144
Sufficiently Up
Slightly volatile
For Ciena Corp profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Ciena Corp to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Ciena Corp utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Ciena Corp's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Ciena Corp over time as well as its relative position and ranking within its peers.
  

Ciena Corp's Revenue Breakdown by Earning Segment

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Is Communications Equipment space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Ciena Corp. If investors know Ciena will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Ciena Corp listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
(0.50)
Earnings Share
0.94
Revenue Per Share
27.627
Quarterly Revenue Growth
(0.12)
Return On Assets
0.0252
The market value of Ciena Corp is measured differently than its book value, which is the value of Ciena that is recorded on the company's balance sheet. Investors also form their own opinion of Ciena Corp's value that differs from its market value or its book value, called intrinsic value, which is Ciena Corp's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Ciena Corp's market value can be influenced by many factors that don't directly affect Ciena Corp's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Ciena Corp's value and its price as these two are different measures arrived at by different means. Investors typically determine if Ciena Corp is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Ciena Corp's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

Ciena Corp Return On Asset vs. Return On Equity Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Ciena Corp's current stock value. Our valuation model uses many indicators to compare Ciena Corp value to that of its competitors to determine the firm's financial worth.
Ciena Corp is rated below average in return on equity category among its peers. It is rated fourth in return on asset category among its peers reporting about  0.53  of Return On Asset per Return On Equity. The ratio of Return On Equity to Return On Asset for Ciena Corp is roughly  1.88 . At this time, Ciena Corp's Return On Equity is very stable compared to the past year. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Ciena Corp's earnings, one of the primary drivers of an investment's value.

Ciena Corp's Earnings Breakdown by Geography

Ciena Return On Asset vs. Return On Equity

Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.

Ciena Corp

Return On Equity

 = 

Net Income

Total Equity

 = 
0.0473
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Return on Asset or ROA shows how effective is the management of the company in generating income from utilizing all of the assets at their disposal. It is a useful ratio to evaluate the performance of different departments of a company as well as to understand management performance over time.

Ciena Corp

Return On Asset

 = 

Net Income

Total Assets

 = 
0.0252
Return on Asset measures overall efficiency of a company in generating profits from its total assets. It is expressed as the percentage of profits earned per dollar of Asset. A low ROA typically means that a company is asset-intensive and therefore will needs more money to continue generating revenue in the future.

Ciena Return On Asset Comparison

Ciena Corp is rated third in return on asset category among its peers.

Ciena Corp Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Ciena Corp, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Ciena Corp will eventually generate negative long term returns. The profitability progress is the general direction of Ciena Corp's change in net profit over the period of time. It can combine multiple indicators of Ciena Corp, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Last ReportedProjected for Next Year
Accumulated Other Comprehensive Income-34 M-32.3 M
Operating Income411.2 M431.7 M
Income Before Tax372.2 M390.8 M
Total Other Income Expense Net-39 M-40.9 M
Net Income293.1 M307.7 M
Income Tax Expense61.9 M65 M
Net Income Applicable To Common Shares293.1 M307.7 M
Net Income From Continuing Ops293.1 M307.7 M
Non Operating Income Net Other-22.7 M-21.6 M
Interest Income55.8 M58.6 M
Net Interest Income-29.9 M-31.4 M
Change To Netincome193.3 M203 M
Net Income Per Share 2.34  2.46 
Income Quality 1.37  1.43 
Net Income Per E B T 0.79  0.83 

Ciena Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Ciena Corp. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Ciena Corp position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Ciena Corp's important profitability drivers and their relationship over time.

Ciena Corp Profitability Trends

Ciena Corp profitability trend refers to the progression of profit or loss within a business. An upward trend means that Ciena Corp's profit has generally increased over time, and a downward profitability trend means profits are declining. Recognizing problems early in profitability trends allows investors to address revenue and cost issues in advance. Investors and analysts usually monitor three types of profitability trends: gross, operating, and net. Gross profit is the difference between revenue and costs of goods sold. Operating profit is Ciena Corp's gross profit minus its overhead. After you account for other unusual revenue, expenses, and costs, you get net profit. Gross profit trends are often a good indicator of future profitability. If you have high gross profit margins, you have a better chance to cover overhead and make money.

Ciena Corp Profitability Drivers Correlations

One of the toughest challenges investors face today is learning how to quickly synthesize and read into endless financial statements and information provided by the company, SEC reporting, and various external parties. Understanding the correlation between Ciena Corp different financial indicators related to revenue and profit generation helps investors identify and prioritize their investing strategies towards Ciena Corp in a much-optimized way. Analyzing correlations between profit drivers that are directly associated with dollar figures is the most effective way to break down Ciena Corp's future profitability.

Use Ciena Corp in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Ciena Corp position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ciena Corp will appreciate offsetting losses from the drop in the long position's value.

Ciena Corp Pair Trading

Ciena Corp Pair Trading Analysis

The ability to find closely correlated positions to Ciena Corp could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Ciena Corp when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Ciena Corp - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Ciena Corp to buy it.
The correlation of Ciena Corp is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Ciena Corp moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Ciena Corp moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Ciena Corp can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

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When determining whether Ciena Corp offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Ciena Corp's financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Ciena Corp Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Ciena Corp Stock:
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To learn how to invest in Ciena Stock, please use our How to Invest in Ciena Corp guide.
You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
To fully project Ciena Corp's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Ciena Corp at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Ciena Corp's income statement, its balance sheet, and the statement of cash flows.
Potential Ciena Corp investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although Ciena Corp investors may work on each financial statement separately, they are all related. The changes in Ciena Corp's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Ciena Corp's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.