Head-To-Head Analysis: Lumentum (NASDAQ:LITE) and Ciena (NYSE:CIEN)

Lumentum (NASDAQ:LITE) and Ciena (NYSE:CIEN) are both computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, dividends, earnings, valuation, institutional ownership and risk.

Earnings and Valuation

This table compares Lumentum and Ciena”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lumentum	$1.65 billion	4.84	-$546.50 million	($6.45)	-17.77
Ciena	$4.01 billion	3.22	$83.96 million	$0.72	127.10

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

Volatility and Risk

Lumentum has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500. Comparatively, Ciena has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Lumentum and Ciena, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lumentum	0	4	11	2	2.88
Ciena	1	4	8	2	2.73

Lumentum currently has a consensus price target of $116.4667, indicating a potential upside of 1.61%. Ciena has a consensus price target of $85.5385, indicating a potential downside of 6.53%. Given Lumentum’s stronger consensus rating and higher possible upside, equities analysts plainly believe Lumentum is more favorable than Ciena.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Lumentum	1.57%	-3.02%	-0.71%
Ciena	2.46%	5.08%	2.55%

Insider & Institutional Ownership

94.1% of Lumentum shares are owned by institutional investors. Comparatively, 92.0% of Ciena shares are owned by institutional investors. 0.2% of Lumentum shares are owned by company insiders. Comparatively, 0.9% of Ciena shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

About Lumentum

Lumentum Holdings Inc. manufactures and sells optical and photonic products in the Americas, the Asia-Pacific, Europe, the Middle East, and Africa. The company operates through two segments: Optical Communications (OpComms) and Commercial Lasers (Lasers). The OpComms segment offers components, modules, and subsystems that enable the transmission and transport of video, audio, and data over high-capacity fiber optic cables. It offers tunable transponders, transceivers, and transmitter modules; tunable lasers, receivers, and modulators; transport products, such as reconfigurable optical add/drop multiplexers, amplifiers, and optical channel monitors, as well as components, including 980nm, multi-mode, and Raman pumps; and switches, attenuators, photodetectors, gain flattening filters, isolators, wavelength-division multiplexing filters, arrayed waveguide gratings, multiplex/de-multiplexers, and integrated passive modules. This segment also provides Super Transport Blade, which integrates optical transport functions into a single-slot blade; vertical-cavity surface-emitting lasers; directly modulated and electro-absorption modulated lasers; and laser illumination sources for 3D sensing systems. It serves customers in telecommunications, data communications, and consumer and industrial markets. The Commercial Lasers segment offers diode-pumped solid-state, fiber, diode, direct-diode, and gas lasers, such as argon-ion and helium-neon lasers for use in original equipment manufacturer applications. It serves customers in markets and applications, such as sheet metal processing, general manufacturing, biotechnology, solar cell processing, graphics and imaging, remote sensing, and precision machining. Lumentum Holdings Inc. was incorporated in 2015 and is headquartered in San Jose, California.

About Ciena

Ciena Corporation provides hardware and software services for delivery of video, data, and voice traffic metro, aggregation, and access communications network worldwide. The company’s Networking Platforms segment offers convergence of coherent optical transport, open optical networking, optical transport network switching, IP routing, and switching services. Its products include 6500 Packet-Optical Platform, Waveserver stackable interconnect system, and the 6500 Reconfigurable line system, and the 5400 family of Packet-Optical platforms, as well as 8100 coherent routing platforms; 3000 family of service delivery switches and the 5000 family of service aggregation switches, as well as 8700 Packetwave Platform and 6500 Packet Transport System. This segment also sells operating system software and enhanced software features embedded in each of its products. The company’s Blue Planet Automation Software and Services segment provides multi-domain service orchestration, inventory, route optimization and analysis, multi-cloud orchestration, and unified assurance and analytics services. Its Platform Software and Service segment offers MCP domain controller solution, and OneControl unified management system, as well as planning tools. The company’s Global Services segment provides maintenance support and training, installation and deployment, and consulting and network design services. Ciena Corporation was incorporated in 1992 and is headquartered in Hanover, Maryland.