Needham & Company analyst Alex Henderson reiterated his Strong Buy rating and $31 price target on CIENA (NYSE: CIEN) following strong Q2 result and guidance and a bullish call.

Henderson said, "Ciena reports as solid quarter, offers a solid guide with a positive mix shift setting up improving results. Ciena positively surprised versus an increasingly bearish view, which had been developing on the Street since the AT&T and Verizon CY1Q results and offered a clear refutation of the bear argument and a strong guide for the July quarter and second half overall. We are reiterating our Buy rating and expect CIEN shares to exhibit strength over the course of the Summer and back half."

Key Take Aways:

• Ciena Management on Call: “We expect a significantly stronger second half”
• B-B was significantly above 1.0 in the April quarter
• Strong uptake from Web 2.0 and IaaS driving business
• Metro Strength: Seeing accelerating demand in metro and expect metro to be a big growth area throughout CY15
• Coherent blade sales increasing as a percent of coherent transport. Blade sales are accelerating and growing faster than overall coherent helping the margins.
• Optical switching combing OTN and packet grew 20% plus. OTN was a bit slower and Packet grew 40% plus.
• Less Legacy: fall off now small enough to no longer be a drag on results—The legacy 10G long-haul and SONET/SDH business carried 40% Operating Margins in the last reported quarter and it fell 48% year-over-year coming in well below estimates. At just $29 million in Revenues or 5% of Revenues, this business is no longer a meaningful drag which should let the improving margins in the rest of the company shine through.
• EMEA Slow But Improving Gradually: Management called out significant expansion in orders internationally and in the submarine business as improving future growth visibility. The upcoming Vodafone business and Ericsson partnership should help accelerate this area

For an analyst ratings summary and ratings history on CIENA click here. For more ratings news on CIENA click here.

Shares of CIENA closed at $18.99 yesterday.