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Ciena (CIEN) Altman Z-Score : 2.20 (As of Jul. 19, 2024)


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What is Ciena Altman Z-Score?

The Altman Z-Score is a model designed to predict the likelihood of a company going bankrupt within the next two years. Created by American finance professor Edward Altman in 1968, the model is specifically designed for publicly traded manufacturing companies with assets greater than $1 million.

Warning Sign:

Altman Z-score of 2.2 is in the grey area. This implies that the company is under some kind of financial stress. If it is below 1.8, the company may face bankruptcy risk.

Ciena has a Altman Z-Score of 2.20, indicating it is in Grey Zones. This implies that Ciena is in some kind of financial stress. If it is below 1.81, the company may face bankrupcy risk.

The zones of discrimination were as such:

When Altman Z-Score <= 1.8, it is in Distress Zones.
When Altman Z-Score >= 3, it is in Safe Zones.
When Altman Z-Score is between 1.8 and 3, it is in Grey Zones.

The historical rank and industry rank for Ciena's Altman Z-Score or its related term are showing as below:

CIEN' s Altman Z-Score Range Over the Past 10 Years
Min: -1.89   Med: 2.01   Max: 3.73
Current: 2.2

During the past 13 years, Ciena's highest Altman Z-Score was 3.73. The lowest was -1.89. And the median was 2.01.


Ciena Altman Z-Score Historical Data

The historical data trend for Ciena's Altman Z-Score 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 Altman Z-Score Chart

Ciena Annual Data
Trend Oct14 Oct15 Oct16 Oct17 Oct18 Oct19 Oct20 Oct21 Oct22 Oct23
Altman Z-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only 2.02 2.51 3.29 2.23 2.08

Ciena Quarterly Data
Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22 Jul22 Oct22 Jan23 Apr23 Jul23 Oct23 Jan24 Apr24
Altman Z-Score 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 2.07 2.07 2.08 2.50 2.10

Competitive Comparison of Ciena's Altman Z-Score

For the Communication Equipment subindustry, Ciena's Altman Z-Score, along with its competitors' market caps and Altman Z-Score 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 Altman Z-Score Distribution in the Hardware Industry

For the Hardware industry and Technology sector, Ciena's Altman Z-Score distribution charts can be found below:

* The bar in red indicates where Ciena's Altman Z-Score falls into.



Ciena Altman Z-Score Calculation

Altman Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

Ciena's Altman Z-Score for today is calculated with this formula:

Z=1.2*X1+1.4*X2+3.3*X3+0.6*X4+1.0*X5
=1.2*0.4683+1.4*-0.5957+3.3*0.051+0.6*2.6092+1.0*0.7384
=2.20

* 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. GuruFocus does not calculate Altman Z-Score when X4 or X5 value is 0.

Trailing Twelve Months (TTM) ended in Apr. 2024:
Total Assets was $5,615 Mil.
Total Current Assets was $3,541 Mil.
Total Current Liabilities was $912 Mil.
Retained Earnings was $-3,345 Mil.
Pre-Tax Income was -16.029 + 71.503 + 70.518 + 64.341 = $190 Mil.
Interest Expense was -23.861 + -23.776 + -24.207 + -24.06 = $-96 Mil.
Revenue was 910.826 + 1037.709 + 1129.487 + 1067.886 = $4,146 Mil.
Market Cap (Today) was $7,135 Mil.
Total Liabilities was $2,735 Mil.

* Note that for stock reported semi-annually or annually, GuruFocus uses latest annual data as the TTM data.

X1=Working Capital/Total Assets
=(Total Current Assets - Total Current Liabilities)/Total Assets
=(3541.347 - 912.191)/5614.803
=0.4683

X2=Retained Earnings/Total Assets
=-3344.705/5614.803
=-0.5957

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(190.333 - -95.904)/5614.803
=0.051

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=7134.954/2734.547
=2.6092

X5=Revenue/Total Assets
=4145.908/5614.803
=0.7384

The zones of discrimination were as such:

Distress Zones - 1.81 < Grey Zones < 2.99 - Safe Zones

Ciena has a Altman Z-Score of 2.20 indicating it is in Grey Zones.

Study by Altman found that companies that are in Distress Zone have more than 80% of chances of bankruptcy in two years.


Ciena  (NYSE:CIEN) Altman Z-Score Explanation

X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors.

X2: Retained Earnings/Total Assets: the RE/TA ratio measures the leverage of a firm. Retained earnings is the account which reports the total amount of reinvested earnings and/or losses of a firm over its entire life. Those firms with high RE, relative to TA, have financed their assets through retention of profits and have not utilized as much debt.

X3, Earnings Before Interest and Taxes/Total Assets (EBIT/TA): This ratio is a measure of the true productivity of the firm's assets, independent of any tax or leverage factors. Since a firm's ultimate existence is based on the earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure. This ratio continually outperforms other profitability measures, including cash flow.

X4, Market Value of Equity/Book Value of Total Liabilities (MVE/TL): The measure shows how much the firm's assets can decline in value (measured by market value of equity plus debt) before the liabilities exceed the assets and the firm becomes insolvent.

X5, Revenue/Total Assets (S/TA): The capital-turnover ratio is a standard financial ratio illustrating the sales generating ability of the firm's assets.

Read more about Altman Z-Score and the original research.


Be Aware

Altman Z-Score does not apply to financial companies.


Ciena Altman Z-Score Related Terms

Thank you for viewing the detailed overview of Ciena's Altman Z-Score 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