Needham Remains Bullish On Ciena Ahead Of Its Quarterly Results As Supply Appears To Be Improving

Ciena Corp CIEN reports quarterly results on September 1 before the market opens.
Needham analyst Alex Henderson expects another supply-constrained quarter, with Orders above Shipments and Revenues modestly ahead of forecast.
He reiterated a Buy and price target of $88.
For the October quarter, the analyst thinks the Street Q/Q growth forecast looks a bit aggressive with Product Sales up 25%-30% Q/Q, not on demand, but supply.
He thinks the Q/Q growth in Product Sales implied by the Street estimate may be hard to achieve even with improving supply.
Conversely, he thinks 1Q23 will be up Q/Q while the Street has it down.
He thinks it's only a matter of time till the large and still growing backlog translates into substantial Revenue and EPS.
Service Revenue will likely grow in the quarter, partially offsetting the decline in Product Sales.
He thinks CIEN looks better positioned in a rising interest rate environment than most names.
Price Action: CIEN shares traded lower by 1.94% at $52.58 on the last check Monday.

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