CIEN STRONG BUY RECOMMENDATION- CIEN at this price is way under-valued for its current revenue as well as long-term revenue outlook. Just based on average bandwidth needs of the Internet (people still thinks the mkt is for the AOL, ERLK.. as examples and the ISPs, imo, these hyped-up Internet stocks will be way down a yr from now) CIEN is at a very good position; remember that the types of products that CIENA did require a long time testing period (always true for large telcos and SPs) and CIEN is way ahead of its many competitors.
If one looks at BW today, just based on slow 33K-56K connections the net is most of the times moving at a crawling pace; bet one spends more time staring into the hour glass than surfing the NET. So, when people start moving into the higher speeds such as 128K, or even higher for DSL and Cable (1M to 10M) links, what do one thinks of the BW needs, 1M is almost 20 times of 56K BW need; so, when people all move to 1M speed (Cable modem) the BW need of the backbone will need to increase 20 times also; in fact, saying that the Internet BW needs will double every nine months is indeed a conservative statement. So, there is no question CIEN will sell its producst especially the new IP/ATM direct over DWDM which will give much better efficiency of BW usage over typical SONET/SDH over DWDM.
Panic investors are chicken out and selling at these bargain basement prices thinking that this is another company going down; BUT, key people from CIENA as well as large investment houses are loading up on it and at the asme time downgrading so they can get these bargain basement prices; CIENA at this point should be between 30-35$ (even with the lost contracts) based on their products revenue, the future products lineds up to address the BW needs and the technical advabtage of IP.ATM over DWDM product to be out; IMO, CIENA at this price is a STRONG BUY. |
