blankmind,
I just saw this synopsis of a Goldman Sachs analysis on the CIEN
thread. Thought you might be interested:
"Here is a copy of some analysis that GS published that underlines how strong Ciena's core business is:
First, Ciena's business is healthy, even with the falloff in current Worldcom business. The January quarter exceeded estimates, with revenue growth of almost 150% and earnings growth of about 185% from last year.
Sales momentum apart from Worldcom is clearly strong. In the October quarter, non-Worldcom business grew by about $11 million or 23% to
$57 million, we estimate. In the January quarter non-Worldcom business grew by $32 million or 55% sequentially to $89 million. In the April quarter, non-Worldcom business is forecast to grow by about $38 million or 45% to $127 million. If Worldcom sales rebound sharply in the fourth quarter, as Worldcom expects, growth should be very strong as we exit the fiscal year.
Second, the customer base is diversifying rapidly. Revenue was booked from a half dozen customers in the quarter, and tens of customers are expected within a couple of quarters.
Third, while there is no likely upside for the April quarter, there is plenty of room for upside later this year from AT&T and others. Our new forecast shows AT&T sales at $87 million this fiscal year out of
$626 million. (Previously, we assumed $50 million out of $590 million total sales, but it is increasingly clear to us that Ciena will be the dominant supplier of 16-channel systems into AT&T this year.)
Finally, the aftermarket valuation seems low; at $45, for example, the stock would be trading at only 25 times next fiscal year's earnings. We believe the top-line growth rate remains at least 40%."
Gary Korn |
