Optical networking specialist Infinera (Nasdaq: INFN) is a longtime Fool favorite. The stock has been a Rule Breakers recommendation since 2007 and also worked its way into three other Foolish scorecards. Two of these analyst teams call Infinera a "buy first" opportunity today as we head into Thursday's fourth-quarter report. The stock also boasts a perfect five out of five stars in our CAPS system with a stunning 98% approval rating among nearly 1,800 investors with an opinion on the stock.

Can the company live up to this top billing? Let's ponder the evidence at hand.

Danger, Will Robinson!
On Wall Street, the expectations aren't all that rosy:


Q4 2011 Estimate

Q4 2011 Guidance (Midpoints)

Q4 2010 Results

Revenue $97.4 million $105 million $117.1 million
Non-GAAP Earnings per Share ($0.12) ($0.10) $0.07

Estimates from Yahoo! Finance; guidance taken from Infinera's Q3 conference call.

As you can see, the average analyst expects Infinera to perform well below the midpoints of management guidance, and even below the $100 million revenue floor management wanted to set. You might presume that the Street lowered its targets when sector rivals Juniper Networks (Nasdaq: JNPR) and Oclaro (Nasdaq: OCLR) swung and missed in January, but that's not the case -- the average EPS goal has been steady for two months, and one analyst even boosted that target a smidgen last week.

That said, Infinera's own management expects to turn in a net loss on slower sales. Share prices fell 9% over the last year, reflecting slowing overall growth in optical networking. Infinera shareholders are actually fairly well off: Juniper shares plunged 42% over the same period and Oclaro crashed to the tune of 70%.

Beyond the numbers
Infinera CEO Tom Fallon sees 2012 as sort of a transition year. Speaking in the last quarterly call, he said: "We believe that most carriers planning to expand capacity are looking to upgrade to 100-gig and 500-gig super-channels in 2012 and beyond."

To put those ultra-fast fiber channels into perspective, the current sweet spot lies in 10- and 40-gigabit connection channels. Infinera is early out of the gate with the 100-gig product and also hopes to set the pace on the next-next generation of 500-gig cards.

I don't think there's any doubt whatsoever that the world remains hungry for more bandwidth. Cisco Systems (Nasdaq: CSCO) predicts consumer bandwidth to quadruple from 2010 to 2015. Akamai Technologies (Nasdaq: AKAM) just published its latest "state of the Internet" report based on traffic to its global network of content servers. The average broadband connection grew 39% faster in just 12 months, while peak speeds spiked 45%. Again, that's just a one-year increase. There are some of the best-connected networking players on the planet; Infinera is just happy to ride the long-term demand wave they're reporting.

What do we do now?
So the long view is strong, but the shorter outlook not so much. Telecom carriers, especially in Infinera's core North American market, seem slow to invest in their networks at the moment. Placing Infinera in the context of recent reports and share-price movements, I'm afraid investors are headed for a bit of a disappointment this week.

While that's terrible news if you really need that investment to pay off by next week, it's not so bad for patient long-term investors and downright good news if you're looking for a better buy-in point. Chances are you'll be rewarded with a great investing window in just a couple of days. Only the smartest investors buy when the night is darkest, after all.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.