Head-To-Head Contrast: Ciena Corporation (CIEN) versus Sierra Wireless (SWIR)

Ciena Corporation (NYSE: CIEN) and Sierra Wireless (NASDAQ:SWIR) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, profitability, risk and dividends.

Profitability

This table compares Ciena Corporation and Sierra Wireless’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ciena Corporation 4.99% 25.53% 7.61%
Sierra Wireless 3.13% 9.16% 5.84%

Insider & Institutional Ownership

25.1% of Sierra Wireless shares are owned by institutional investors. 1.5% of Ciena Corporation shares are owned by insiders. Comparatively, 2.0% of Sierra Wireless shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Ciena Corporation has a beta of 1.68, meaning that its share price is 68% more volatile than the S&P 500. Comparatively, Sierra Wireless has a beta of 3.11, meaning that its share price is 211% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Ciena Corporation and Sierra Wireless, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ciena Corporation 0 3 19 0 2.86
Sierra Wireless 1 7 2 0 2.10

Ciena Corporation currently has a consensus target price of $29.78, indicating a potential upside of 35.60%. Sierra Wireless has a consensus target price of $24.75, indicating a potential upside of 11.74%. Given Ciena Corporation’s stronger consensus rating and higher possible upside, equities analysts plainly believe Ciena Corporation is more favorable than Sierra Wireless.

Earnings and Valuation

This table compares Ciena Corporation and Sierra Wireless’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ciena Corporation $2.77 billion 1.12 $361.58 million $0.92 23.87
Sierra Wireless $651.88 million 1.09 $42.36 million $0.62 35.73

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

Summary

Ciena Corporation beats Sierra Wireless on 10 of the 14 factors compared between the two stocks.

About Ciena Corporation

Ciena Corporation is a network strategy and technology company, which provides solutions that enable a range of network operators to adopt communication architectures and deliver an array of services, relied upon by enterprise and consumer end users. It provides equipment, software and services that support the transport, switching, aggregation, service delivery and management of voice, video and data traffic on communications networks. It segments include Networking Platforms; Software and Software-Related Services, and Global Services. The Networking Platforms segment consists of Converged Packet Optical, Packet Networking and Optical Transport product portfolios. The software business is engaged in the development and licensing of element and network management software and software-related services that support its hardware offerings. It offers a suite of consulting and support services that help its customers to design, optimize, deploy and maintain their communications networks.

About Sierra Wireless

Sierra Wireless, Inc. is engaged in building the Internet of Things (IoT) with wireless solutions for organizations. The Company’s OEM Solution segment offers cellular embedded wireless modules for IoT connectivity, including an embedded application framework to support customer applications. The Company’s Enterprise Solution segment offers intelligent routers and gateways, including management tools and applications that enable cellular connectivity. The Company’s Cloud and Connectivity Services segment offers a cloud based platform for deploying and managing IoT applications, Smart SIM supported by mobile core networks, and managed wireless broadband services to enable customer IoT deployments. The Company offers a portfolio of second generation, third generation, and fourth generation cellular embedded wireless modules and gateways, integrated with its secure cloud and connectivity services. The Company offers its products to original equipment manufacturers (OEMs) and enterprises.

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