Is Ciena Corp. overvalued or undervalued?

As of 30 June 2025, the valuation grade for Ciena Corp. moved from expensive to very expensive, indicating a significant increase in perceived overvaluation. The company is overvalued, with a P/E ratio of 96, a price-to-book value of 3.70, and an EV to EBITDA ratio of 30.35. In comparison, Ubiquiti, Inc., a peer in the telecom equipment industry, has a more reasonable P/E ratio of 49.59 and an EV to EBITDA of 41.27, highlighting the disparity in valuation.
Ciena Corp. has demonstrated strong stock performance, with a one-year return of 144.71%, significantly outperforming the S&P 500's return of 17.14% over the same period. This impressive performance may suggest investor optimism, but the high valuation ratios raise concerns about sustainability. Overall, Ciena Corp. appears to be overvalued relative to its peers and fundamental metrics.