Ciena stock price target raised to $120 from $100 at Stifel on AI orders

Investing.com - Stifel raised its price target on Ciena (NYSE:CIEN), currently trading at $116.92 with a market capitalization of $16.38 billion, to $120 from $100 on Thursday, maintaining a Buy rating following the company’s strong fiscal third-quarter results and raised guidance.

Ciena reported fiscal third-quarter revenue of $1.22 billion, exceeding the consensus estimate of $1.17 billion. The company delivered adjusted gross margin of 41.9% and adjusted operating margin of 10.7%, both surpassing expectations, while adjusted earnings per share reached $0.67 compared to the $0.53 consensus. According to InvestingPro data, the company maintains a healthy financial position with a current ratio of 3.4, indicating strong liquidity.

The networking equipment provider raised its fiscal year 2025 revenue growth guidance to 17.0% year-over-year, up from its previous forecast of 14.0%. The company also provided preliminary fiscal year 2026 guidance, projecting another 17.0% revenue growth with 43.0% gross margin and 15.5% operating margin. This optimistic outlook has contributed to the stock’s impressive 72.62% return over the past year.

Stifel highlighted two major artificial intelligence-related orders driving Ciena’s improved outlook: GPU cluster interconnects using the company’s RLS and WL6nano technologies ramping in the first half of fiscal 2026, and co-developed DCOM technology ramping in the fiscal fourth quarter.

The firm noted potential near-term catalysts for Ciena including a technology-focused investor event and the European Conference on Optical Communications (ECOC) later this month. For deeper insights into Ciena’s valuation and growth prospects, InvestingPro subscribers can access exclusive analysis and 13 additional ProTips in our comprehensive Pro Research Report.

In other recent news, Ciena Corporation reported strong financial results for the third quarter of fiscal year 2025, surpassing analyst expectations. The company achieved earnings per share of $0.67, which was significantly higher than the forecasted $0.53. Revenue for the quarter reached $1.22 billion, exceeding the anticipated $1.17 billion, driven largely by the webscale/cloud segment, which experienced over 90% growth and now constitutes 40% of sales. Following these results, several analyst firms adjusted their outlook on Ciena. BofA Securities raised its price target for Ciena to $135, maintaining a Buy rating, citing the impressive third-quarter performance. Similarly, Raymond James increased its price target to $120 while keeping an Outperform rating, acknowledging the company’s forecasted 17% growth for fiscal year 2026. Evercore ISI also raised its price target to $120, maintaining an "In Line" rating after the strong quarterly results. These developments reflect positive sentiment among analysts regarding Ciena’s future growth prospects.

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