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Ciena (CIEN) Graham Number : $24.48 (As of Apr. 2024)


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What is Ciena Graham Number?

Graham Number is a figure that measures a stock's fundamental value by taking into account the company's earnings per share and book value per share. The Graham number is the upper bound of the price range that a defensive investor should pay for the stock. According to the theory, any stock price below the Graham number is considered undervalued, and thus worth investing in.

As of today (2024-07-22), the stock price of Ciena is $49.39. Ciena's graham number for the quarter that ended in Apr. 2024 was $24.48. Therefore, Ciena's Price to Graham Number ratio for today is 2.02.

The historical rank and industry rank for Ciena's Graham Number or its related term are showing as below:

CIEN' s Price-to-Graham-Number Range Over the Past 10 Years
Min: 1.23   Med: 2.02   Max: 15.78
Current: 2.02

During the past 13 years, the highest Price to Graham Number ratio of Ciena was 15.78. The lowest was 1.23. And the median was 2.02.

CIEN's Price-to-Graham-Number is ranked worse than
65.18% of 1594 companies
in the Hardware industry
Industry Median: 1.51 vs CIEN: 2.02

Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.


Ciena Graham Number Historical Data

The historical data trend for Ciena's Graham Number can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Ciena Graham Number Chart

Ciena Annual Data
Trend Oct14 Oct15 Oct16 Oct17 Oct18 Oct19 Oct20 Oct21 Oct22 Oct23
Graham Number
Get a 7-Day Free Trial Premium Member Only Premium Member Only 21.52 27.56 35.90 20.51 30.48

Ciena Quarterly Data
Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22 Jul22 Oct22 Jan23 Apr23 Jul23 Oct23 Jan24 Apr24
Graham Number Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 23.94 27.44 28.16 27.61 24.48

Competitive Comparison of Ciena's Graham Number

For the Communication Equipment subindustry, Ciena's Price-to-Graham-Number, along with its competitors' market caps and Price-to-Graham-Number data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Ciena's Price-to-Graham-Number Distribution in the Hardware Industry

For the Hardware industry and Technology sector, Ciena's Price-to-Graham-Number distribution charts can be found below:

* The bar in red indicates where Ciena's Price-to-Graham-Number falls into.



Ciena Graham Number Calculation

Graham Number is a concept based on Ben Graham's conservative valuation of companies.

Ciena's Graham Number for the fiscal year that ended in Oct. 2023 is calculated as

Graham Number
=sqrt of (22.5* Tangible Book per Share *EPS without NRI)
=sqrt of (22.5*15.176*2.72)
=30.48

Ciena's Graham Number for the quarter that ended in Apr. 2024 is calculated as

Graham Number
=sqrt of (22.5*Tangible Book per Share*EPS without NRI (TTM))
=sqrt of (22.5*15.606*1.707)
=24.48

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Ciena  (NYSE:CIEN) Graham Number Explanation

Ben Graham actually did not publish a formula like this. But he wrote in The Intelligent Investor (1948 version) regarding to the criteria for purchases:

Current price should not be more than 15 times average earnings of the past three years.

Current price should not be more than 1.5 times the book value last reported. However, a multiplier of earnings below 15 could justify a correspondingly higher multiplier of assets. As a rule of thumb we suggest that the product of the multiplier times the ratio of price to book value should not exceed 22.5. (This figure corresponds to 15 times earnings and 1.5 times book value. It would admit an issue selling at only 9 times earnings and 2.5 times asset value, etc.)

Unlike valuation methods such as DCF or Discounted Earnings, the Graham number does not take growth into the valuation. Unlike the valuation methods based on book value alone, it takes into account the earnings power. Therefore, the Graham Number is a combination of asset valuation and earnings power valuation.

In general, the Graham number is a very conservative way of valuing a stock. It cannot be applied to companies with negative book values.

Ciena's Price to Graham number Ratio for today is calculated as

Price to Graham number=Share Price (Today)/Graham number (Q: Apr. 2024 )
=49.39/24.48
=2.02

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Please keep these in mind:

1. Graham Number does not take growth into account. Therefore it underestimates the values of the companies that have good earnings growth. We feel that if the earnings per share grows more than 10% a year, Graham Number underestimates the value.
2. Graham Number punishes the companies that have temporarily low earnings. Therefore, an average of earnings makes more sense in the calculation of Graham Number.
3. Graham Numbers underestimates companies that are light with book.


Ciena Graham Number Related Terms

Thank you for viewing the detailed overview of Ciena's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.


Ciena (CIEN) Business Description

Address
7035 Ridge Road, Hanover, MD, USA, 21076
Ciena Corp is a network and technology company. It provides network hardware, software, and services that support the transport, switching, aggregation, service delivery, and management of video, data, and voice traffic on communications networks. It serves various industries such as communication services providers, web-scale providers, cable operators, government, and large enterprises world-wide. The business activities function through Networking Platforms; Platform Software and Services; Blue Planet Automation Software, and Global Services segments. Geographically, its presence is seen in the markets of the United States, Canada, the Caribbean, Latin America, Europe, the Middle East, Africa, the Asia Pacific, Japan, and India. The maximum revenue is generated from Americas.
Executives
David M Rothenstein officer: Sr. VP, General Counsel 7035 RIDGE ROAD, HANOVER MD 21076
Gary B Smith director, officer: President, CEO C/O CIENA CORPORATION, 7035 RIDGE ROAD, HANOVER MD 21076
Brodie Gage officer: SVP Global Products & Supply 2351 ALFRED-NOBEL BLVD, SUITE N-300, SAINT LAURENT A8 H4S 2A9
Dino Diperna officer: SVP Global R&D 385 TERRY FOX DR, OTTAWA A6 K2K OL1
Jason Phipps officer: SVP Global Sales and Marketing 7410 RIDGE RD, HANOVER MD 21076
Joseph Cumello officer: SVP, General Mgr. Blue Planet 7035 RIDGE RD, HANOVER MD 21076
Scott Mcfeely officer: SVP, Networking Platforms 7035 RIDGE RD, HANOVER MD 21076
Mary G Puma director AXCELIS TECHNOLOGIES INC., 108 CHERRY HILL DRIVE, BEVERLY MA 01915
Andrew C Petrik officer: VP, CONTROLLER 7035 RIDGE ROAD, HANOVER MD 21076
Sheela Kosaraju officer: SVP, General Counsel 43-51 WORSHIP ST, LONDON X0 EC2A 2DX
Stephen B Alexander officer: SVP, Chief Technology Officer C/O CIENA CORPORATION, 7035 RIDGE ROAD, HANOVER MD 21076
Rick Hamilton officer: SVP, Software and Services 9500 AMBERGIEN, AUSTIN TX 78729
Moylan James E Jr officer: SVP Finance, CFO CIENA CORPORATION, 7035 RIDGE ROAD, HANOVER MD 21076
Judith M Obrien director 855 MAUDE AVENUE, MOUNTAIN VIEW CA 94043
Thomas Michael Nevens director C/O BORLAND SOFTWARE CORPORATION, 20450 STEVENS CREEK BLVD, SUITE 800, CUPERTINO CA 95014