I now have had time to get over the shock and beating from the INFN quarterly miss.

Fundamentally the company's main products are sound.  They continue to grab market share.  The problem is with one customer which from the noise made by MKM has simply turned off the spigot and judgning from their research note, this customer is not likely to come back.  Since no other firm has disputed MKM's research, I must assume it is so.

So, we have the DTN-X,  Cloud Xpress (sp?), the Transmode Metro product and the older DTN. With the exception of the momentary hicup from the Transmode product, these products are still generating very healthy revenue growth for INFN  The company is guiding for "$255M plus or minus $5M" (as stated in CC).  This represents a revenue growth of 23% YoY.  The company is still on track to achieve a Yearly revenue run rate of $1B, even with the loss of the Transmode customer.

I too believe that even though the Transmode is off to a very slow start outside of the customer that walked away, it is positioned for a market segment that is growing.  INFN may have dropped the ball here, but they have a healthy roster of customers globally. It should be a player in this segment and will up its game to ensure that it can cross sell it into existing customer geographies.  The Infinite Engine product announced recently will deliver multi-terabyte per line card. This product will future proof Infinera company for several more years.

INFN is now trading at a forward PE of ~14 even if I assume a lower growth rate than this next quarter (at 23%) and bring it down to 17% it is still undervalued, IMO.  Its Price to Sales is below 2 and Price to Book at 2.18. It is acquisition bate.