Ciena (CIEN) stock climbed on Thursday after the optical networking equipment maker outlined new financial targets at its investor forum, and analysts raised their price targets following the update.
The stock surged to its intraday high of $375.7 before easing most of the gains and was trading 4% higher at $357.35 at the time of writing.
Ciena expects revenue to grow at a compound annual growth rate of around 30% from fiscal 2026 through fiscal 2029.
The company also expects an adjusted gross margin of about 50% and a free cash flow margin of 20% by fiscal 2029.
Management also highlighted continued supply constraints, which analysts said could affect the company’s ability to meet demand.
Ciena targets 30% revenue growth through 2029
Barclays analyst Tim Long said Ciena’s long-term framework calls for approximately 30% growth, representing around $14 billion in fiscal 2029 revenue.
“Importantly, management emphasized that its long-term outlook incorporates a conservative view of inside the data center opportunities,” Long said. He added that Ciena’s fiscal 2027 outlook represents a “supply floor”, suggesting potential upside if component availability improves.
Long also highlighted the company’s margin expectations, noting that fiscal 2029 operating margin guidance of 32% to 35% would represent a new level of profitability as revenue expands and Ciena’s products become more important to network infrastructure.
TD Cowen reiterated a Buy rating and a $400 price target following the investor forum.
The firm also highlighted Ciena’s projected revenue growth, along with gross margin and operating margins.
Ciena has already reported 33% revenue growth over the last 12 months, although its current gross margin of 44% remains below its long-term target.
AI data-centre demand supports Ciena
Ciena’s optical equipment is used in telecom networks and hyperscale data centres.
While telecom customers have been ordering less network equipment, demand from data centres has been increasing amid the artificial intelligence infrastructure buildout.
Meta Platforms and Alphabet are Ciena’s largest data-centre customers.
TD Cowen pointed to Ciena’s technology capabilities in mixed-signal analog expertise and systems-level optimisation for connectivity infrastructure.
Its solutions span from rack-level connectivity to continental-scale networks.
The firm also highlighted growing investment in optical transport networks, including data-centre interconnect and metro and long-haul infrastructure, as potential drivers for Ciena.
Ciena’s AGI-related opportunity comes alongside continued investment in optical networking as hyperscalers expand their infrastructure.
Supply constraints remain a factor in the company’s outlook, however.
Analysts raise Ciena price targets
Several Wall Street firms raised their price targets after Ciena’s investor forum.
Barclays analyst Tim Long lifted his target to $548 from $475 while maintaining an Overweight rating.
Northland raised its target to $550 from $500 and maintained an Outperform rating.
Morgan Stanley increased its target to $450 from $425 while keeping an Equal Weight rating.
Rosenblatt analyst Mike Genovese reiterated a Buy rating and a $525 price target.
Northland said Ciena’s new targets point to earnings power of more than $25 per share, while Morgan Stanley said the multi-year targets were around 10% ahead of the Street’s EPS expectations.
Morgan Stanley also said it wanted to see additional quarters of new product flow, while identifying gross-margin expansion as a potential catalyst.
According to Koyfin data, 14 of the 20 analysts covering Ciena rate the stock Buy or Strong Buy, while six rate it Hold.
Rosenblatt also said Ciena’s demand commentary was positive for Nokia, which it expects could qualify as a second optical data-centre interconnect supplier. Nokia shares were up 4% at the time of writing.
The post Ciena stock rises as analysts lift target after $14B FY29 revenue outlook appeared first on Invezz
