I’ve warned before that Ciena (CIEN) really isn’t a great buy-and-hold stock (unless you have a lot of patience…), and the past few months have backed that up. While the shares did well after my last write-up and a strong second quarter, the shares started to weaken in July with growing concerns about the near-term growth outlook pushing the stock back below $20 for a time.
The outlook for optical in 2018 is not particularly strong, with expectations for basically no growth in long-haul and concerns in metro that Verizon (VZ) spending has already peaked. While Ciena still has some company-specific drivers like its datacenter interconnect business, its new WaveLogic Ai chipset, and its growing software business, this company has long struggled to regain credibility from the Street and confidence in management’s long-term goals for revenue and margins.
