Why Infinera Corp. Is Poised to Bounce Back

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Infinera (NASDAQ: INFN  ) climbed about 5% in premarket trading Wednesday after Goldman Sachs upgraded the optical networking technologist from neutral to buy.

So what: Along with the upgrade, analyst Simona Jankowski planted a price target of $11.50, representing about 36% worth of upside to yesterday's close. While momentum traders might be turned off by the stock's weakness in recent months, Jankowski's call suggests growing sentiment on Wall Street that Infinera is now too cheap to pass up. 

Now what: According to Goldman, Infinera's risk/reward trade-off is particularly attractive at the moment. "We believe consensus is underestimating the revenue growth potential associated with customer upgrades and market share gains in 100G long haul, which is forecast to grow at nearly a 40% CAGR through 2015," said Jankowski. When you couple that upbeat outlook with Infinera's solid balance sheet and sluggish stock price, it's tough to disagree with Goldman's upgrade.

Editor's Note: The previous version incorrectly identified Goldman's analyst call as a downgrade. This version has been corrected and The Motley Fool apologizes for the error.

More compelling ways to grow
They said it couldn't be done. But David Gardner has proved them wrong, time, and time, and time again, with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently, one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

Read/Post Comments (4) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 12, 2014, at 10:52 AM, DSmod wrote:

    You write, "it's tough to disagree with Goldman's downgrade." I reckon you meant to say 'upgrade', seeing as how it was... an upgrade.

  • Report this Comment On March 12, 2014, at 10:55 AM, foolishdave wrote:

    When you couple that upbeat outlook with Infinera's solid balance sheet and sluggish stock price, it's tough to disagree with Goldman's downgrade.

    typo? think you meant upgrade

  • Report this Comment On March 12, 2014, at 3:45 PM, TMFEZMagic wrote:

    DSmod and foolynaround, thanks for heads up! I absolutely meant "upgrade". All fixed now. :)

  • Report this Comment On March 12, 2014, at 3:52 PM, surflyfe wrote:

    Interesting post. On the same day this was posted there was a post on Motley Fool saying "Things don't look too good for Infinera today as it's only earned three out of seven possible passing grades."

    So which one is it? The Motley Fool seems to be playing both sides.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2873372, ~/Articles/ArticleHandler.aspx, 9/1/2015 6:28:16 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Brian Pacampara

I take a look at big 10% moves, as well as stock-shaking analyst calls, on a daily basis for The Fool. While I don't believe in active trading, closely monitoring Mr. Market's mood swings can help identify long-term opportunities.

Today's Market

updated 9 hours ago Sponsored by:
DOW 16,528.03 -114.98 -0.69%
S&P 500 1,972.18 -16.69 -0.84%
NASD 4,776.51 -51.82 -1.07%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/31/2015 3:59 PM
INFN $21.82 Down -0.47 -2.11%
Infinera CAPS Rating: *****