See the Light
Optical stocks are tough for even the pros to figure out.
The technology is mind-numbingly complex and one advancement
can make products obsolete overnight. Here's a cheat sheet
for some of the high-flying optical stocks.
STOCK EST. SALES EARNINGS/LOSS VALUATION
Millions of Dollars
Ciena $997 $117 $36,108
What slowdown? Ciena recently told analysts they should
raise their earnings estimates for fiscal 2001. The company
has made smart acquisitions to boost its capabilities in the
metropolitan optical and switching markets. Still, Ciena
could be too small to survive on its own. It needs to get
big quickly or risk getting bought.
Corvis 31.8 -131.1 24,687
Corvis has two things going for it: Blazing-hot technology
and founder David Huber, who's on his second optics company
(the first was Ciena). Its long-haul transmission gear
shoots signals farther than anyone else's. It hasn't
reported any revenues yet, but it has $550 million in
orders. The risks: Its sky-high valuation means any missteps
will meet with severe Wall Street punishmentâıand that could
boost the pressure to sell.
JDS Uniphase** 2,500** 437.9** 99,723
The giant maker of optical components may be the closest
thing to a bulletproof optics play. Equipment makers like
Nortel stitch JDS-made lasers, switches, and receivers into
systems to sell. Partly to add manufacturing capacity, the
company agreed to spend $41 billion to acquire SDL. Wide
product variety and long customer list reduce risk.
ONI Systems 38.4 -84.4 11,340
Investors like ONI because its products add capacity in
metropolitan phone networks. But, the company has a
relatively small backlog of orders and its target customers
are the Baby Bells, which may take their time in upgrading
their networks.
Sycamore Networks 373 46.5 27,220
Experts like its long-haul technology and praise its plan
for "smart" switches that will blend optics and electronics.
It moved into the metro market by buying Sirocco Systems.
Still, the company relies heavily on one major customer,
Williams Communications.
*All sales and earnings estimates are for calendar year
2000.
**Results are pro forma, including results of recently
acquired E-Tek Dynamics.
DATA: Zacks Investment Research, I/B/E/S, First Call,
Bloomberg Financial Markets, Merrill Lynch & Co., Business
Week |
