Rosenblatt Securities lowered its price target for Ciena Corp. (NYSE:CIEN) to $525 from $720. The firm maintained a "Buy" rating on the stock.
This adjustment follows Ciena's strong quarterly earnings report. The company's revenue grew 37% year-over-year. Ciena's earnings also beat analyst expectations.
Rosenblatt's reasoning cites a shift in valuation methodology. The firm now bases its target on actual earnings estimates, replacing future earnings power projections. Rosenblatt cites compressed multiples across the sector.
This move follows Ciena's recent stock rally and its in-line fourth-quarter guidance. These factors prompted several analysts to re-evaluate Ciena's high valuation.