In my previous blog posts, I laid out a plan how to evaluate stocks using three methods.
In the blog post on how to evaluate a stock, I listed three methods when valuing a stock:
- P/E Multiple method
- DCF model
- Return on equity valuation method
I later dive deep into PE multiple method, and calculate CIEN’s intrinsic value as 39.7379.
| CIEN Price (Ciena Corporation stock price per share) |
$59.93 | |
| [?] | CIEN Fair Price (based on intrinsic value) |
$25.84 |
| [?] | CIEN Safety Price (based on a variable margin of safety) | $15.50 |
In my latest blog post, I used ROE model and calculated the intrinsic value of CIEN as $23.74639 .
I later said,
The current share price $44.28 of CIEN as of Friday 9/5/2020 is very much overvalued, in my opinion.By the way, Ciena price target lowered to $37 from $53 at Barclays. Reiterate Underweight.Barclay’s analyst Tim Long lowered the firms price target on Ciena to $37 from $53 and keeps an Underweight weight rating on the shares. The company’s fiscal Q3 beat on sales, margin, and earnings; but guidance surprised to the downside.
So based on the above research, I think $23.74639 is CIEN’s intrinsic value, and the safe price to buy is around $15.50 for the margin of safety.
The current share price $44.28 of CIEN as of Friday 9/5/2020 is very much overvalued, in my opinion.
Disclaimer: I am just sharing my information, not suggesting you to buy any stocks or investments. Use the info here at your own risk. Please make your own judgements when making investment decisions.