Optical networking equipment company Ciena (CIEN -2.61%) has turned out to be a solid investment over the past six months as its shares gained 16% amid improving business conditions. The good news is that this tech stock may have more upside to offer following its fiscal 2023 first-quarter results (for the three months ended Jan. 28, 2023) which were released on March 6.

The company's top and bottom lines rose impressively over the prior-year period, and it also upgraded its fiscal 2023 revenue guidance. Let's take a closer look at Ciena's latest quarterly report and check why shares of this networking company could head higher.

Healthy networking equipment demand gives Ciena a boost

Ciena's fiscal 2023 first-quarter revenue increased 25% year over year to $1.06 billion thanks to robust demand for the company's optical, routing, and switching equipment. More specifically, Ciena's WaveLogic optical networking platform added 13 new customers last quarter. Meanwhile, revenue from the company's routing and switching solutions increased an impressive 39% over the prior year thanks to record shipments for these products.

Additionally, Ciena's adjusted earnings rose an impressive 36% over the prior-year period to $0.64 per share last quarter. Analysts were expecting Ciena to report adjusted earnings of $0.36 per share on revenue of $959 million, but the company's huge order backlog, improving supply chain conditions, and new customer wins helped it smash estimates.

Even better, Ciena has updated its full-year outlook and now anticipates revenue to increase between 20% and 22% in fiscal 2023. That's an improvement over Ciena's earlier expectation of 16% to 18% revenue growth this fiscal year. The upgraded guidance suggests that the networking company could end the year with a top line of $4.4 billion at the midpoint.

But don't be surprised to see Ciena exceed that mark, given its order backlog of $4.2 billion as well as the fact that it is witnessing solid order inflows in the current fiscal year. In fact, management expects to finish the fiscal year with a backlog that would be higher than its historical average. That won't be surprising as Ciena serves multiple networking niches such as cloud computing, data centers, the Internet of Things, and 5G networks, among others.

With the global optical transport network market expected to grow almost 10% in 2023 to $24 billion and Ciena management expecting to gain a share in this space, the company is set up for another solid year. Additionally, investors can expect Ciena to sustain impressive growth over the long run as well, thanks to the secular growth of the optical communications and networking market.

KVB Research predicts nearly 9% annual growth for the optical communications market through 2028, forecasting annual revenue of $38.5 billion at the end of the forecast period. This explains why analysts anticipate healthy bottom-line growth from the company from last fiscal year's level of $1.90 per share.

CIEN EPS Estimates for Current Fiscal Year Chart.

CIEN EPS Estimates for Current Fiscal Year data by YCharts.

Valuation makes Ciena stock an attractive buy right now

Ciena is trading at just 2 times sales right now, which is a discount to the S&P 500's multiple of 2.3. Additionally, the forward earnings multiple of 19.8 represents a discount to the S&P 500's forward earnings multiple of 23.7.

Buying this tech stock at these multiples looks like a no-brainer considering the top and bottom-line growth it is expected to deliver in 2023 and beyond. The stock carries a 12-month median price target of $65 based on a consensus of 14 analysts, which points toward a 30% upside from current levels. Meanwhile, the Street high price target of $86 would translate into nearly 73% gains.

Ciena's strong order backlog, the inflow of new orders, and potential market share gains indicate that the stock can deliver the gains that Wall Street is expecting from it, which is why savvy investors may consider buying it before it soars higher.