Ciena's (CIEN) Advanced Optical Technology Leveraged by Constl

Zacks Equity Research
·4-min read

Ciena Corporation's CIEN cutting-edge optical technology has been deployed by India-based Space World Group’s subsidiary, Constl.

Constl is utilizing Ciena’s optical technology to offer high-speed Metro Area Network and National Long Distance connectivity services across its “state-of-the-art pan-India network,” enhancing the connectivity solutions in the region.

Space World Group, the holding company of Constl, is a renowned conglomerate that invests in technology-driven companies focused on elevating customer experiences across various sectors. With a legacy spanning 17 years in sectors like Telecom, Metal Fabrication and Chemical Manufacturing, Space World Group’s strategic launch of Constl in 2023 signifies its commitment to being India’s premier neutral connectivity provider, delivering top-tier digital telecom infrastructure solutions to the B2B sector.

Ciena’s 6500 Packet-Optical Platform, empowered by WaveLogic 5 Extreme (WL5e) technology plays a crucial role in this initiative. This innovative platform enables Constl to deliver services of up to 800G in the current period, with seamless scalability to 1.6T services through WaveLogic 6 going ahead.

Constl’s network structure will leverage CIEN’s 6500 Reconfigurable Line System, a solution that offers programmability, scale and resiliency at the photonic layer. This capability allows Constl to swiftly adapt to fluctuating traffic requirements and align its network operations with the evolving needs of its customers’ businesses.

Furthermore, by utilizing Ciena’s Navigator Network Control Suite, Constl gains a centralized view of its multi-layer network infrastructure, enhancing operational efficiencies in planning, provisioning and assurance workflows.

Hanover, MD-based Ciena Corporation is a leading provider of optical networking equipment, software and services. It operates its business under four segments — Networking Platforms, Platform Software and Services, Blue Planet Automation Software and Services and Global Services.

Ciena’s innovative offerings are receiving healthy adoption among its core customers. Recently, Conterra Networks has leveraged Ciena’s flagship WL5e to deliver 400Gb/s wavelength services to network clients in Texas, North Carolina and Louisiana.  

Also, its GeoMesh Extreme submarine network solution has been selected by SEA-ME-WE 4 (South East Asia – Middle East – Western Europe 4) to cushion the rising demand for smooth connectivity across the circuit.

However, peer pressure from other tech giants like Cisco, Huawei, Nokia, Juniper Networks and ZTE is reducing the company’s market share. An unfavourable macroeconomic backdrop is generating lower-than-expected order volumes from service providers in several overseas markets.

Supply chain-driven key component shortages, extended lead times, large orders placed in response to market demands and customer inventory builds of networking equipment remain additional headwinds.

CIEN currently carries a Zacks Rank #4 (Sell). The stock has gained 0.9% compared with the sub-industry’s growth of 0.6% in the past year.

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Key Picks

Arista Networks, Inc. ANET, sporting a Zacks Rank #1 (Strong Buy) at present, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arista has a long-term earnings growth expectation of 15.7% and delivered an earnings surprise of 15.4%, on average, in the trailing four quarters.

Motorola Solutions, Inc. MSI, carrying a Zacks Rank #2 (Buy) at present, delivered an earnings surprise of 7.5%, on average, in the trailing four quarters. It has a long-term earnings growth expectation of 9.5%.

Motorola provides services and solutions to government segments and public safety programs, along with large enterprises and wireless infrastructure service providers. It develops and services both analog and digital two-way radio, voice and data communications products and systems for private networks, wireless broadband systems and end-to-end enterprise mobility solutions to a wide range of enterprise markets.

NVIDIA Corporation NVDA, sporting a Zacks Rank #1 at present, is another key pick in the broader industry. It is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, NVDA’s focus has evolved from PC graphics to AI-based solutions that now support high-performance computing, gaming and virtual reality platforms.

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