Ciena (NYSE:CIEN – Get Free Report) and Arista Networks (NYSE:ANET – Get Free Report) are both large-cap technology companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, institutional ownership, earnings, profitability and dividends.
Profitability
This table compares Ciena and Arista Networks’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ciena | 10.87% | 25.33% | 11.27% |
| Arista Networks | 38.37% | 30.65% | 19.44% |
Earnings & Valuation
This table compares Ciena and Arista Networks”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ciena | $4.77 billion | 9.68 | $123.34 million | $4.48 | 72.65 |
| Arista Networks | $9.01 billion | 24.41 | $3.51 billion | $3.17 | 54.98 |
Arista Networks has higher revenue and earnings than Ciena. Arista Networks is trading at a lower price-to-earnings ratio than Ciena, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current recommendations and price targets for Ciena and Arista Networks, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ciena | 0 | 6 | 15 | 1 | 2.77 |
| Arista Networks | 0 | 1 | 21 | 2 | 3.04 |
Ciena presently has a consensus target price of $485.93, indicating a potential upside of 49.30%. Arista Networks has a consensus target price of $233.20, indicating a potential upside of 33.80%. Given Ciena’s higher probable upside, analysts plainly believe Ciena is more favorable than Arista Networks.
Insider & Institutional Ownership
92.0% of Ciena shares are owned by institutional investors. Comparatively, 82.5% of Arista Networks shares are owned by institutional investors. 0.6% of Ciena shares are owned by company insiders. Comparatively, 2.7% of Arista Networks shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Risk & Volatility
Ciena has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500. Comparatively, Arista Networks has a beta of 1.6, indicating that its share price is 60% more volatile than the S&P 500.
Summary
Arista Networks beats Ciena on 11 of the 15 factors compared between the two stocks.
About Ciena
Ciena Corporation provides hardware and software services for delivery of video, data, and voice traffic metro, aggregation, and access communications network worldwide. The company’s Networking Platforms segment offers convergence of coherent optical transport, open optical networking, optical transport network switching, IP routing, and switching services. Its products include 6500 Packet-Optical Platform, Waveserver stackable interconnect system, and the 6500 Reconfigurable line system, and the 5400 family of Packet-Optical platforms, as well as 8100 coherent routing platforms; 3000 family of service delivery switches and the 5000 family of service aggregation switches, as well as 8700 Packetwave Platform and 6500 Packet Transport System. This segment also sells operating system software and enhanced software features embedded in each of its products. The company’s Blue Planet Automation Software and Services segment provides multi-domain service orchestration, inventory, route optimization and analysis, multi-cloud orchestration, and unified assurance and analytics services. Its Platform Software and Service segment offers MCP domain controller solution, and OneControl unified management system, as well as planning tools. The company’s Global Services segment provides maintenance support and training, installation and deployment, and consulting and network design services. Ciena Corporation was incorporated in 1992 and is headquartered in Hanover, Maryland.
About Arista Networks
Arista Networks, Inc. engages in the development, marketing, and sale of data-driven, client to cloud networking solutions for data center, campus, and routing environments in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. Its cloud networking solutions consist of Extensible Operating System (EOS), a publish-subscribe state-sharing networking operating system offered in combination with a set of network applications. The company offers data center and cloud networking systems, including newer artificial intelligence (AI) ethernet switching platforms; campus wired and wireless products, and routing systems addressing Core Routing, Edge Routing, Data Center Interconnect (DCI), Multi-cloud and Wide Area Networking (WAN) use cases; and a suite of value-add software solutions that leverage EOS to provide end-to-end orchestration, automation, analytics, network monitoring, and security. It also provides post contract customer support services, such as technical support, hardware repair and replacement parts beyond standard warranty, bug fixes, patches, and upgrade services. The company serves a range of industries comprising internet companies, service providers, financial services organizations, government agencies, media and entertainment companies, telecommunication service providers, and others. It markets and sells its products through distributors, system integrators, value-added resellers, and original equipment manufacturer partners, as well as through its direct sales force. The company was formerly known as Arastra, Inc. and changed its name to Arista Networks, Inc. in October 2008. Arista Networks, Inc. was incorporated in 2004 and is headquartered in Santa Clara, California.
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