Ciena (CIEN) versus Fabrinet (FN) Critical Comparison

Share on StockTwits

Ciena (NYSE: CIEN) and Fabrinet (NYSE:FN) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, earnings, risk, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

97.7% of Fabrinet shares are held by institutional investors. 1.4% of Ciena shares are held by insiders. Comparatively, 3.3% of Fabrinet shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Ciena and Fabrinet’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ciena $2.80 billion 1.27 $1.26 billion $1.49 16.69
Fabrinet $1.42 billion 0.95 $97.11 million $2.57 14.26

Ciena has higher revenue and earnings than Fabrinet. Fabrinet is trading at a lower price-to-earnings ratio than Ciena, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Ciena has a beta of 1.34, indicating that its stock price is 34% more volatile than the S&P 500. Comparatively, Fabrinet has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Ciena and Fabrinet, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ciena 0 3 19 0 2.86
Fabrinet 0 2 3 1 2.83

Ciena currently has a consensus target price of $29.60, suggesting a potential upside of 19.00%. Fabrinet has a consensus target price of $40.67, suggesting a potential upside of 10.93%. Given Ciena’s stronger consensus rating and higher probable upside, research analysts clearly believe Ciena is more favorable than Fabrinet.

Profitability

This table compares Ciena and Fabrinet’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ciena 26.69% 9.92% 4.78%
Fabrinet 6.36% 12.48% 8.52%

Summary

Ciena beats Fabrinet on 9 of the 15 factors compared between the two stocks.

About Ciena

Ciena Corporation provides hardware, software, and services that support the transport, switching, aggregation, service delivery, and management of voice, video, and data traffic on communications networks worldwide. The company's Networking Platforms segment offers hardware networking solutions optimized for the convergence of coherent optical transport, optical transport network switching, and packet switching. Its products include 6500 Packet-Optical Platform and the 5430 Reconfigurable Switching System, Waveserver stackable interconnect system, CoreDirector Multiservice Optical Switches, and OTN configuration for the 5410 Reconfigurable Switching System, as well as Z-Series Packet-Optical Platform; 3000 family of service delivery switches and service aggregation switches, and the 5000 family of service aggregation switches, as well as 8700 Packetwave Platform and the Ethernet packet configuration for the 5410 Service Aggregation Switch; and 4200 Advanced Services Platform, 5100/5200 Advanced Services Platform, Common Photonic Layer, and 6100 Multiservice Optical Platform. This segment also sells operating system software and enhanced software features embedded in each of its products. The company's Software and Software-Related Services segment offers network management solutions, including the OneControl Unified Management System, ON-Center Network & Service Management Suite, Ethernet Services Manager, Optical Suite Release, and Planet Operate; and Blue Planet network virtualization, service orchestration, and network management software platform, as well as related installation, support, and consulting services. Its Global Services segment provides consulting and network design, installation and deployment, maintenance support, and training services. The company sells its products through direct and indirect sales channels to network operators. Ciena Corporation was founded in 1992 and is headquartered in Hanover, Maryland.

About Fabrinet

Fabrinet provides optical packaging and precision optical, electro-mechanical, and electronic manufacturing services to original equipment manufacturers of optical communication components, modules and sub-systems, industrial lasers, medical devices, and sensors. It offers a range of optical and electro-mechanical capabilities across the manufacturing process, including process design and engineering, supply chain management, manufacturing, printed circuit board assembly, packaging, integration, final assembly, and test. The company's products comprise switching products, such as reconfigurable optical add-drop multiplexers, optical amplifiers, modulators, and other optical components and modules that enable network managers to route voice, video, and data communications traffic through fiber optic cables at various wavelengths and speeds, and over various distances; tunable lasers, transceivers, and transponders; and active optical cables, which provide high-speed interconnect capabilities for data centers and computing clusters, as well as for Infiniband, Ethernet, fiber channel, and optical backplane connectivity. It also offers solid state, diode-pumped, gas, and fiber lasers used across semiconductor processing, biotechnology and medical device, metrology, and material processing industries; and sensors, such as differential pressure, micro-gyro, fuel, and other sensors used in automobiles, as well as non-contact temperature measurement sensors for the medical industry. In addition, the company designs and fabricates application-specific crystals, lenses, prisms, mirrors, and laser components and substrates, as well as other custom and standard borosilicate, clear fused quartz, and synthetic fused silica glass products. It has operations in North America, the Asia-Pacific, and Europe. The company was incorporated in 1999 and is based in George Town, the Cayman Islands.

Receive News & Ratings for Ciena Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Ciena and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply