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Technology Stocks : Ciena (CIEN)
CIEN 238.47-3.2%4:00 PM EST
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To: Helios who wrote (1341)2/20/1998 5:20:00 PM
From: craig crawford  Read Replies (1) of 12623
 
<< Any comments on how Ciena's management team stands up against theses guys? >>

Too early to tell. CIEN hasn't been around long enough. I would say they have done a fantastic job so far. The CEO is supposed to be interviewed on CNBC today. (an hour or so?)

I think CIEN will post great numbers for 1998. The company said they were still comfortable with revenue estimates of $600 million. That is a 62% increase over the $373 million reported in 1997.

CIEN was forecast to earn $1.47 for 1998. That is where the worry lies. They already posted 0.37 for Q1. That means they need to make 1.10 for the next 3 Q's. That's 36.66 cents per quarter. In other words CIEN could have flat sequential EPS for the next 3 Q's in a row and still make the original estimate of $1.47 I don't think they will have too much problem coming up with 3 flat Q's. Maybe Q2 and Q3 are slightly below the 37 cents for Q1 and they post a strong resurgence in Q4.

At any rate if they post a $1.47 for 1998 they will have achieved 35% growth. (I think they did $1.09 for 1997. Some sources say $1.07. It's at least 35% and maybe 37%)

A multiple of 35x $1.47 = a price of 51.45
At a price of 42 CIEN would carry a multiple of 28.57

The key to the story is do you think CIEN will make $1.47?
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