Ciena (CIEN) closed at $44.10 in the latest trading session, marking a -0.59% move from the prior day. This change was narrower than the S&P 500's 0.65% loss on the day. Meanwhile, the Dow lost 0.42%, and the Nasdaq, a tech-heavy index, lost 0.46%.
Heading into today, shares of the developer of high-speed networking technology had gained 0.14% over the past month, lagging the Computer and Technology sector's gain of 5.63% and the S&P 500's gain of 4.11% 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 $0.57 per share, which would represent year-over-year growth of 18.75%. Our most recent consensus estimate is calling for quarterly revenue of $929.87 million, up 13.56% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.99 per share and revenue of $3.53 billion. These totals would mark changes of +43.17% and +13.97%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for CIEN. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 holding a Zacks Rank of #2 (Buy) right now.
In terms of valuation, CIEN is currently trading at a Forward P/E ratio of 22.25. For comparison, its industry has an average Forward P/E of 20.8, which means CIEN is trading at a premium to the group.
It is also worth noting that CIEN currently has a PEG ratio of 1.28. 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 1.45 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 109, which puts 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.
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