Street Calls of the Week
HANOVER, Md. - Network technology provider Ciena Corporation (NYSE:CIEN), with a market capitalization of $19.52 billion and annual revenue of $4.54 billion, announced Monday it has entered into a definitive agreement to acquire privately-held Nubis Communications for $270 million in an all-cash transaction.
New Jersey-based Nubis specializes in high-performance optical and electrical interconnects designed for artificial intelligence workloads. The acquisition is expected to close during Ciena’s fiscal fourth quarter 2025, subject to customary closing conditions. According to InvestingPro data, Ciena maintains a healthy financial position with a current ratio of 3.28, indicating strong ability to fund acquisitions.
The deal will expand Ciena’s portfolio with two key technologies: Co-Packaged Optics/Near Packaged Optics that deliver up to 6.4 Tb/s full-duplex bandwidth, and Electrical Active Copper Cables that enable high-speed data transmission up to 4 meters at 200 Gb/s per lane.
"The acquisition of Nubis represents a significant step forward in Ciena’s strategy to address the rapidly growing demand for scalable, high-performance connectivity inside the data center," said David Rothenstein, Chief Strategy Officer at Ciena, according to the press release.
The transaction also brings more than 50 engineers with data center expertise to Ciena’s team. The purchase price is subject to customary adjustments for cash, debt, and net working capital at closing.
Nubis CEO Dan Harding stated that the combined companies will work to deliver "reliable, high-quality, and high-performance interconnect solutions to support the next generation of AI workloads."
The boards of directors of both companies and Nubis shareholders have approved the transaction, according to the company statement. With Ciena’s stock showing remarkable strength, up 136% over the past year and trading near its 52-week high, InvestingPro analysis suggests the stock is currently trading above its Fair Value. Investors can access detailed valuation metrics and 20 additional ProTips through InvestingPro’s comprehensive research platform.
In other recent news, Ciena has reported fiscal third-quarter results that exceeded market expectations, with revenue reaching $1.22 billion, surpassing the consensus estimate of $1.17 billion. The company also delivered adjusted earnings per share of $0.67, which was higher than the expected $0.53. Ciena provided fourth-quarter revenue growth guidance of 14% year-over-year, further exceeding market forecasts. Following these strong results, several analyst firms have raised their price targets for the company. Needham increased its target to $130, maintaining a Buy rating, while JPMorgan raised its target to $140, citing Ciena’s leadership in the optical systems market. Rosenblatt adjusted its target to $127.50, reflecting a revised earnings per share forecast for fiscal year 2026. Stifel also raised its target to $120, maintaining a Buy rating, and BofA Securities increased its target to $135, highlighting cloud growth as a key factor. These developments underscore the positive sentiment among analysts regarding Ciena’s recent performance and future prospects.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.