Ciena to Report Q1 Earnings: How to Approach the Stock Now?

Ciena Corporation CIEN will report first-quarter fiscal 2026 results on March 5, before market open.

The Zacks Consensus Estimate for earnings for the to-be-reported quarter is pegged at $1.13 per share, indicating growth of 76.6% year over year. Analysts have significantly revised their estimates upward for CIEN’s bottom line over the past 60 days.

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The consensus estimate for total revenues is pinned at $1.39 billion, implying an increase of 29.9% year over year.

For the first quarter of fiscal 2026, management expects revenues in the range of $1.35-$1.43 billion.

What Our Model Predicts for CIEN

Our proven model does not predict an earnings beat for CIEN this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. That is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

CIEN has an Earnings ESP of 0.00% and a Zacks Rank #3.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors to Focus on Ahead of CIEN’s Q1 Earnings

Ciena is likely to have gained from rising network traffic and growing bandwidth demand, largely driven by expanding AI use cases. Its Cloud and Service Provider customers are prioritizing network investments to support AI-driven traffic growth, creating long-term opportunities for its Systems and Interconnects businesses. The company is directing R&D toward Coherent Optical Systems, Interconnects, Coherent Routing and solutions such as DCOM, while scaling back residential broadband investments.

Blue Planet remains integral to major provider projects, enabling digital transformation through AI- and data-driven tools. With a $5 billion backlog, including $3.8 billion in hardware and software, Ciena has solid support for 2026 revenue and clear demand signals into 2027 and beyond. This might have positively impacted the company’s first-quarter fiscal 2026 performance.

The company continues to expect fiscal 2026 gross margins to be approximately 43%, plus or minus one percentage point. On the last earnings call, management highlighted that while the company is mitigating input cost pressures through supply rebalancing, cost reductions and pricing actions, the benefits of these efforts are expected to be realized later in fiscal 2026. The company anticipates gross margin to improve from the first half to the second half of the year. For the first quarter, adjusted gross margin is estimated between 43% and 44%, while adjusted operating margin is projected at 15.5-16.5%.

Apart from this, Ciena is benefiting from solid demand for packet optical transport, switching solutions, integrated networking offerings and service management software. Its growing presence in data center connectivity is expanding exposure to the broader end-to-end optical and data equipment market. The company remains a leading provider of 40G and 100G optical transport technologies, while Fiber Deep continues to present a meaningful opportunity, supported by strong adoption among major global cable operators.

Ciena Corporation Price and Consensus

Ciena Corporation price-consensus-chart | Ciena Corporation Quote

However, Ciena continues to incur elevated expenses due to strategic investments and technology expansion. Fiscal fourth-quarter adjusted operating expenses rose 15.2% year over year to $408.7 million, exceeding guidance due to higher incentive payouts. The company is facing near-term pressure from NPI ramp challenges and rising input costs amid supply constraints. Fiscal 2026 capex is projected at $250–$275 million, above historical levels, which might have negatively impacted the to-be-reported quarter’s performance. Additionally, revenue concentration among a limited number of large service providers poses risk, as the loss of a major customer could materially impact performance.

Stiff competition from Cisco Systems, Inc. CSCO, Nokia NOK and Arista Networks, Inc. ANET remains a concern.

CIEN Stock Performance

Ciena shares have risen 347.8% over the past year, outperforming the Zacks Computer & Technology sector and the Zacks Internet Software Services industry’s growth of 32.9% and 268.2%, respectively. The S&P 500 Composite has returned 22.9% over the same time frame.

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Shares of the company’s peers CSCO, NOK and ANET have surged 27.1%, 59.9% and 45.1%, respectively, in the same period.

CIEN' Stretched Valuation

CIEN stock is not so cheap, as its Value Style Score of D suggests a stretched valuation at this moment.

In terms of Price/Book, CIEN shares are trading at 18.24X, higher than the Internet Software Services industry’s 10.81X, indicating more risk than opportunity.

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In comparison, CSCO, NOK and ANET trade at multiples of 6.55X, 1.83X and 13.53X, respectively.

What to Do With CIEN Stock Before Q1?

Ciena’s expanding AI-driven opportunities, strong backlog visibility and growing traction across cloud, data center and service provider markets bode well, but stretched valuation and high capex pressure are concerning.

Given the uncertainties, new investors could wait for a better entry point, while existing investors can hold the stock for long-term gains.

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This article originally published on Zacks Investment Research (zacks.com).

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