Financial Contrast: F5 (NASDAQ:FFIV) versus Ciena (NYSE:CIEN)

Ciena (NYSE:CIEN) and F5 (NASDAQ:FFIV) are both large-cap technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, dividends, analyst recommendations and risk.

Institutional & Insider Ownership

92.0% of Ciena shares are held by institutional investors. Comparatively, 90.7% of F5 shares are held by institutional investors. 0.6% of Ciena shares are held by company insiders. Comparatively, 0.5% of F5 shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Ciena and F5’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ciena	10.87%	25.33%	11.27%
F5	21.95%	21.54%	12.16%

Volatility and Risk

Ciena has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500. Comparatively, F5 has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Ciena and F5, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ciena	0	5	14	1	2.80
F5	1	5	5	0	2.36

Ciena presently has a consensus target price of $492.68, suggesting a potential upside of 38.27%. F5 has a consensus target price of $416.62, suggesting a potential downside of 5.97%. Given Ciena’s stronger consensus rating and higher probable upside, analysts clearly believe Ciena is more favorable than F5.

Earnings & Valuation

This table compares Ciena and F5″s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ciena	$4.77 billion	10.59	$123.34 million	$4.48	79.54
F5	$3.09 billion	8.12	$692.38 million	$12.56	35.28

F5 has lower revenue, but higher earnings than Ciena. F5 is trading at a lower price-to-earnings ratio than Ciena, indicating that it is currently the more affordable of the two stocks.

Summary

Ciena beats F5 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 F5

F5, Inc. provides multi-cloud application security and delivery solutions in the United States, Europe, the Middle East, Africa, and the Asia Pacific region. The company’s distributed cloud services enable its customers to deploy, secure, and operate applications in any architecture, from on-premises to the public cloud. It offers unified, security, networking, and application management solutions, such as web app and API protection; multi-cloud networking; application delivery and deployment; domain name system; content delivery network; and application deployment and orchestration. The company also provides application security and delivery products, including NGINX Plus; NGINX Management Suite; NGINX Ingress Controller; NGINX App Protect; BIG-IP Packaged Software; and BIG-IP Systems. In addition, it provides a range of professional services, including maintenance, consulting, training, and other technical support services. F5, Inc. sells its products to large enterprise businesses, public sector institutions, governments, and service providers through distributors, value-added resellers, managed service providers, systems integrators, and other indirect channel partners. It has partnerships with public cloud providers, such as Amazon Web Services, Microsoft Azure, and Google Cloud Platform. The company was formerly known as F5 Networks, Inc. and changed its name to F5, Inc. in November 2021. F5, Inc. was incorporated in 1996 and is headquartered in Seattle, Washington.