Ciena fell following its earnings report this week, creating a buying opportunity for investors to scoop shares up at a discount, according to Citi. The bank has a buy rating on the network technology stock. It also has a $658 price target on shares, suggesting 107% upside from Thursday’s close. “The company’s preliminary expectation for 30% growth [year-over-year] is a floor that will move higher with increased supply,” analyst Atif Malik said Thursday in a note to clients. “We like CIEN’s established leadership in the optical transport market and with gradually improving telco and cable markets, we see a re-rating in growth.” Shares of Ciena slumped 10% on Thursday after the company issued an underwhelming revenue outlook for its current fiscal year. That pushed the stock even deeper into the red, with shares down roughly 41% over the past three months. CIEN 3M mountain Shares have fallen 41% over the past three months. On Thursday, Ciena said it sees revenue coming in at $6.42 billion, plus or minus $50 million, for the fiscal year ending October. By comparison, analysts polled by FactSet are anticipating the firm will clock $6.34 billion over the same period. That mismatch in expectations overshadowed the company’s stronger-than-expected results for the third quarter. However, Ciena should still gain ground, particularly as the artificial intelligence-linked data center buildout stands to drive more value to its shares, per Citi. “We expect cloud spending to remain healthy and AI-related data center interconnect (DCI) to be an incremental growth driver,” Malik wrote. Citi’s call falls into line with consensus on the Street. Of the 20 analysts covering Ciena, 14 have a buy or strong buy rating on the stock, LSEG data shows.
