CIENA Corp (CIEN) is overvalued and Telefonaktiebolaget L M Ericsson ADR (ERIC) is undervalued.
Against our estimates of intrinsic value, ERIC trades at the wider discount: a margin of safety of +23%, against -707% for CIEN.
Values as of the 22 Sept 2026 close.
Discounting its cash flows at 10.8% (average of 2 methods) values the shares at $45.66; the price of $368.56 is 707% above that value.
Leak Score 49/100 on 10 of 12 signals
Discounting its cash flows at 9.3% (average of 3 methods) values the shares at $12.69; the price of $9.82 is 23% below that value, and 74% of that value comes from beyond year five.
Leak Score 100/100 on 3 of 12 signals
| Metric | CIEN | ERIC |
|---|---|---|
| Verdict | Overvalued | Undervalued |
| Price | $368.56 | $9.82 |
| Intrinsic value | $45.66 | $12.69 |
| Margin of safety | -707% | +23% |
| Leak Score | 49/100 (10/12) | 100/100 (3/12) |
| Market cap | $52.3B | $29.9B |
| Revenue growth, 5 years | 6.2% | -0.9% |
| Operating margin | 14.1% | 13.8% |
| Net margin | 10.9% | 10.8% |
| Return on equity | 22.4% | 26.3% |
| Debt to equity | 1.07 | 0.38 |
| P/E | 82.2x | 12.6x |
| Forward P/E | 31.3x | 14.9x |
| P/B | 17.1x | 3.0x |
| Dividend yield | — | 3.3% |