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Ciena (CIEN) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

In the latest trading session, Ciena (CIEN) closed at $41.46, marking a -1.54% move from the previous day. This change lagged the S&P 500's daily loss of 0.79%. Meanwhile, the Dow lost 0.66%, and the Nasdaq, a tech-heavy index, lost 0.68%.

Heading into today, shares of the developer of high-speed networking technology had lost 2.21% over the past month, lagging the Computer and Technology sector's loss of 1.41% and the S&P 500's loss of 1.62% in that time.

Wall Street will be looking for positivity from CIEN as it approaches its next earnings report date. This is expected to be September 5, 2019. In that report, analysts expect CIEN to post earnings of $0.57 per share. This would mark year-over-year growth of 18.75%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $930.51 million, up 13.64% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2 per share and revenue of $3.53 billion. These totals would mark changes of +43.88% and +14.02%, respectively, from last year.

Any recent changes to analyst estimates for CIEN should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. CIEN currently has a Zacks Rank of #3 (Hold).

Investors should also note CIEN's current valuation metrics, including its Forward P/E ratio of 21.02. This valuation marks a premium compared to its industry's average Forward P/E of 20.5.

Investors should also note that CIEN has a PEG ratio of 1.21 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Fiber Optics stocks are, on average, holding a PEG ratio of 1.44 based on yesterday's closing prices.

The Fiber Optics industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 110, putting it in the top 43% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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