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Ciena (CIEN) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3 min read

Ciena (CIEN) closed at $38.81 in the latest trading session, marking a +0.96% move from the prior day. This move lagged the S&P 500's daily gain of 1.2%. At the same time, the Dow added 0.53%, and the tech-heavy Nasdaq gained 1.64%.

Coming into today, shares of the developer of high-speed networking technology had lost 3.15% in the past month. In that same time, the Computer and Technology sector lost 1.12%, while the S&P 500 lost 2.23%.

Investors will be hoping for strength from CIEN as it approaches its next earnings release. On that day, CIEN is projected to report earnings of $0.63 per share, which would represent year-over-year growth of 8.62%. Our most recent consensus estimate is calling for quarterly revenue of $828.61 million, down 14.4% from the year-ago period.

CIEN's full-year Zacks Consensus Estimates are calling for earnings of $2.98 per share and revenue of $3.53 billion. These results would represent year-over-year changes of +41.23% and -1.15%, respectively.

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

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.67% lower within the past month. CIEN currently has a Zacks Rank of #4 (Sell).

Investors should also note CIEN's current valuation metrics, including its Forward P/E ratio of 12.92. Its industry sports an average Forward P/E of 12.92, so we one might conclude that CIEN is trading at a no noticeable deviation comparatively.

We can also see that CIEN currently has a PEG ratio of 0.81. 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. The Fiber Optics industry currently had an average PEG ratio of 0.81 as of yesterday's close.

The Fiber Optics industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 249, which puts it in the bottom 2% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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