Financial Comparison: Alcatel Lucent (ALU) versus Ciena (CIEN)

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

Risk and Volatility

Alcatel Lucent has a beta of 2.05, indicating that its stock price is 105% more volatile than the S&P 500. Comparatively, Ciena has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500.

Earnings and Valuation

This table compares Alcatel Lucent and Ciena’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Alcatel Lucent N/A N/A N/A $0.08 43.25
Ciena $2.80 billion 1.14 $1.26 billion $7.99 2.78

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

Profitability

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

Net Margins Return on Equity Return on Assets
Alcatel Lucent 14.83% 86.14% 10.96%
Ciena 45.04% 18.32% 7.02%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Alcatel Lucent and Ciena, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alcatel Lucent 0 0 0 0 N/A
Ciena 0 2 19 0 2.90

Ciena has a consensus target price of $28.55, indicating a potential upside of 28.33%. Given Ciena’s higher probable upside, analysts plainly believe Ciena is more favorable than Alcatel Lucent.

Summary

Ciena beats Alcatel Lucent on 5 of the 9 factors compared between the two stocks.

About Alcatel Lucent

Alcatel Lucent SA is a provider of Internet protocol (IP) networking, ultra-broadband access and cloud technology solutions. The Company operates through two segments for the networks business. The Ultra Broadband Networks segment consists of Mobile Networks and Fixed Networks business groups. The IP Networks and Applications segment consists of Internet protocol (IP)/Optical Networks and Applications and Analytics business groups. Its other segment consists of businesses run as separate operations (Alcatel Submarine Networks and Radio Frequency Systems (RFS)). The Company offers a range of solutions, including Communications and collaboration, IP Core Routing, IP/optical integration, long term evolution (LTE) Ultra-Broadband, Software-defined networking and Vplus. The Company offers a range of consulting, managed, maintenance and professional services, including Bell Labs Consulting and Build, Operate and Manage (BOM) Solution for Mobility Networks. The main shareholder is Nokia.

About Ciena

Ciena Corporation is a network strategy and technology company, which provides solutions that enable a range of network operators to adopt communication architectures and deliver an array of services, relied upon by enterprise and consumer end users. It provides equipment, software and services that support the transport, switching, aggregation, service delivery and management of voice, video and data traffic on communications networks. It segments include Networking Platforms; Software and Software-Related Services, and Global Services. The Networking Platforms segment consists of Converged Packet Optical, Packet Networking and Optical Transport product portfolios. The software business is engaged in the development and licensing of element and network management software and software-related services that support its hardware offerings. It offers a suite of consulting and support services that help its customers to design, optimize, deploy and maintain their communications networks.

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