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

Zacks Equity Research

Ciena (CIEN) closed at $37.31 in the latest trading session, marking a +0.95% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.75%. Meanwhile, the Dow gained 0.69%, and the Nasdaq, a tech-heavy index, added 1.32%.

Coming into today, shares of the developer of high-speed networking technology had gained 0.19% in the past month. In that same time, the Computer and Technology sector gained 5.59%, while the S&P 500 gained 3.42%.

CIEN will be looking to display strength as it nears its next earnings release, which is expected to be December 12, 2019. The company is expected to report EPS of $0.63, up 18.87% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $964.80 million, up 7.28% from the year-ago period.

Investors might also notice recent changes to analyst estimates for CIEN. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. CIEN is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note CIEN's current valuation metrics, including its Forward P/E ratio of 14.27. For comparison, its industry has an average Forward P/E of 14.27, which means CIEN is trading at a no noticeable deviation to the group.

It is also worth noting that CIEN currently has a PEG ratio of 0.82. 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. CIEN's industry had an average PEG ratio of 0.82 as of yesterday's close.

The Fiber Optics industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 104, putting it in the top 41% 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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