Ciena Corporation (CIEN) vs Ericsson (ERIC)

Ciena Corporation and Ericsson are both Communication Equipment companies. Ciena Corporation is the larger, with a market value of $51.7B against $29.4B — 1.8× the size. Ericsson trades at the lower P/E: 12.2× against 77.3×. Ciena Corporation grew revenue faster over the last twelve months: 32.6% against 2.26%. Ciena Corporation has the higher net margin (10.9% vs 10.6%) and the lower return on invested capital (12.6% vs 25.1%). Across the 22 metrics below, Ericsson leads on 14 and Ciena Corporation on 8.

Valuation

Metric CIEN ERIC Communication Equipment median
P/E 77.25 12.22 33.61
P/S 8.42 1.30 2.16
P/B 16.59 2.80 2.40
Price to free cash flow 62.26 10.24 25.02
EV/EBITDA 56.14 6.70 13.78
EV/Sales 8.52 1.20 2.27
Earnings yield 1.29% 8.18% (0.65%)
Free cash flow yield 1.61% 9.77% 1.61%

Profitability

Metric CIEN ERIC Communication Equipment median
Gross margin 44.07% 46.99% 39.47%
Operating margin 12.27% 14.52% 2.39%
Net margin 10.87% 10.61% (0.74%)
Free cash flow margin 13.53% 12.72% 1.39%
Return on equity 22.40% 0.00% (1.91%)
Return on assets 9.52% 8.76% (0.20%)
Return on invested capital 12.63% 25.09% 0.72%

Growth

Metric CIEN ERIC Communication Equipment median
Revenue growth (TTM) 32.57% 2.26% 11.48%
EPS growth (last fiscal year) 46.55% 0.00% —
Revenue growth, 5-year CAGR 6.19% (0.92%) 4.92%
Net income growth, 5-year CAGR (19.34%) 8.80% 0.00%

Health

Metric CIEN ERIC Communication Equipment median
Debt to equity 1.06 0.30 0.06
Current ratio 3.80 1.12 2.01
Net debt to EBITDA 0.67 (0.50) 0.67

Dividend

Metric CIEN ERIC Communication Equipment median
Dividend yield — 4.83% 2.63%
Payout ratio 0.00 0.72 0.00

Size

Metric CIEN ERIC Communication Equipment median
Market cap 51.73b 29.36b 563.45m

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