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Ciena (CIEN) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
AptarGroup (ATR) might move higher on growing optimism about its earnings prospects, which is reflected by its upgrade to a Zacks Rank 1 (Strong Buy).

Ciena (CIEN) closed the most recent trading day at $38.61, moving +1.02% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.11%. Elsewhere, the Dow gained 0.04%, while the tech-heavy Nasdaq added 0.19%.

Prior to today's trading, shares of the developer of high-speed networking technology had gained 3.1% over the past month. This has lagged the Computer and Technology sector's gain of 6.07% and the S&P 500's gain of 4.42% in that time.

CIEN will be looking to display strength as it nears its next earnings release. On that day, CIEN is projected to report earnings of $0.41 per share, which would represent year-over-year growth of 78.26%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $818.47 million, up 12.12% from the year-ago period.

CIEN's full-year Zacks Consensus Estimates are calling for earnings of $1.81 per share and revenue of $3.35 billion. These results would represent year-over-year changes of +30.22% and +8.23%, respectively.

Any recent changes to analyst estimates for CIEN should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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 is currently a Zacks Rank #1 (Strong Buy).

Valuation is also important, so investors should note that CIEN has a Forward P/E ratio of 21.15 right now. For comparison, its industry has an average Forward P/E of 22.74, which means CIEN is trading at a discount to the group.

Meanwhile, CIEN's PEG ratio is currently 1.26. 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 1.65 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 2, putting it in the top 1% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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