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

Zacks Equity Research

In the latest trading session, Ciena (CIEN) closed at $38.05, marking a +0.71% move from the previous day. This change outpaced the S&P 500's 0.16% gain on the day. Meanwhile, the Dow 0%, and the Nasdaq, a tech-heavy index, added 0.26%.

Prior to today's trading, shares of the developer of high-speed networking technology had gained 0.69% over the past month. This has lagged the Computer and Technology sector's gain of 4.79% and the S&P 500's gain of 4.12% in that time.

Wall Street will be looking for positivity from CIEN as it approaches its next earnings report date. On that day, CIEN is projected to report earnings of $0.63 per share, which would represent year-over-year growth of 18.87%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $964.80 million, up 7.28% from the year-ago period.

It is also important to note the recent changes to analyst estimates for CIEN. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that CIEN has a Forward P/E ratio of 14.76 right now. For comparison, its industry has an average Forward P/E of 14.76, which means CIEN is trading at a no noticeable deviation to the group.

Also, we should mention that CIEN has a PEG ratio of 0.85. 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 0.85 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 103, which puts it in the top 41% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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