Network and communication infrastructure provider Ciena (NYSE:CIEN) reported better-than-expected Q2 results. Despite the upbeat performance, CIEN stock declined about 11% during Tuesday’s after-hours trading session. The decrease can be attributed to the company’s weaker-than-anticipated revenue guidance for the third quarter.
Q2 adjusted earnings per share came in at $0.74, which beat analysts’ consensus estimate of $0.63 per share and compares favorably with $0.50 per share in the year-ago quarter. Sales increased by 19.3% year-over-year to $1.13 billion and surpassed analysts’ expectations of $1.08 billion.
It is worth highlighting that following the earnings release, two analysts revisited their ratings on CIEN stock and maintained a Hold.
In a note to investors yesterday, Morgan Stanley analyst Meta Marshall said Ciena seems well poised for long-term growth based on its increasing market share and efforts to expand TAM. However, Marshall expressed concerns about the decrease in orders from both Product and Service customers of the company, hoping that this downturn would only be temporary.
CIEN Stock: Fiscal 2023 and Q3 Guidance
Looking forward, CIEN forecasts Fiscal 2023 revenue growth in the range of 18% to 22%, compared with the consensus estimate of 19.6% growth. Also, the company raised its operating expenses guidance to about $1.33 billion as it continues to invest in the expansion of the total addressable market (TAM).
For the fiscal third quarter, Ciena anticipates revenue to be between $1 billion and $1.08 billion, which remains below Wall Street’s expectations of $1.10 billion. Finally, Q3 adjusted expenses are expected to be nearly $335 million.
Is CIEN a Good Stock to Buy Now?
Among the 13 top Wall Street analysts giving ratings on CIEN stock, 10 recommend a Buy and three suggest a Hold. Thus, top analysts are optimistic about Ciena with a Strong Buy consensus rating. Further, the consensus 12-month price target of all top analysts of $65.75 implies an upside potential of 55.1%.
It is noteworthy that these top analysts have an impressive history of helping investors generate massive returns from their recommendations. Moreover, each analyst has a remarkable success rate.
