Is Ciena Corp. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Ciena Corp. has moved from fair to very expensive, indicating a significant concern regarding its current market valuation. The company appears overvalued, particularly when considering its P/E ratio of 96, which is substantially higher than its peer Ubiquiti, Inc., which has a P/E of 49.59. Additionally, Ciena's EV to EBITDA ratio stands at 30.35, again reflecting a premium compared to Ubiquiti's 41.27, while its EV to Sales ratio of 2.38 also suggests a higher valuation relative to industry standards.
In terms of performance, Ciena has demonstrated impressive returns, with a 1-year stock return of 157.03% compared to the S&P 500's 14.08%, and a remarkable 3-year return of 322.93% against the S&P 500's 81.19%. Despite these strong returns, the elevated valuation ratios indicate that the stock may not be sustainable at its current price levels.