• Why Finisar Corporation Stock Fumbled 30% in 2014

Why Finisar could rise again
Despite the murky near-term outlook, investors should remember that Finisar's top customers include networking giants Cisco (NASDAQ: CSCO ) and Ciena (NYSE: CIEN ) , and that the fiber optic upgrade cycle can result in seasonal slowdowns in revenue and earnings growth. As 4G LTE networks expand and wireless providers order more networking equipment from companies like Cisco and Ciena, demand will trickle down and boost sales of Finisar's fiber optic components. For now, the stock is trading at bargain basement prices based on its sales and earnings multiples:

Mkt. Cap	Trailing P/E	Forward P/E	PEG Ratio	P/S	P/B
$1.68B	17.33	11.48	0.82	1.37	1.59

Source: Yahoo Finance, Nov. 4

Finisar's current P/E of 17 sits at a three year low, while its PEG ratio of 0.82 suggests that it is undervalued based on forward earnings estimates. Of course, value stocks like Finisar will remain on sale until its current problems can be cleared up.

Leo Sun has no position in any stocks mentioned. The Motley Fool recommends Cisco Systems.