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

Zacks Equity Research

Ciena (CIEN) closed the most recent trading day at $43.13, moving -0.37% from the previous trading session. This change lagged the S&P 500's 0.45% gain on the day. Meanwhile, the Dow gained 0.29%, and the Nasdaq, a tech-heavy index, added 0.75%.

Prior to today's trading, shares of the developer of high-speed networking technology had lost 1.66% over the past month. This has lagged the Computer and Technology sector's gain of 5.19% and the S&P 500's gain of 3.84% in that time.

Investors will be hoping for strength from CIEN as it approaches its next earnings release. The company is expected to report EPS of $0.56, up 16.67% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $929.87 million, up 13.56% from the prior-year quarter.

CIEN's full-year Zacks Consensus Estimates are calling for earnings of $1.99 per share and revenue of $3.53 billion. These results would represent year-over-year changes of +43.17% and +13.96%, 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 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, 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 2.72% higher 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 21.74. This valuation marks a premium compared to its industry's average Forward P/E of 20.51.

Meanwhile, CIEN's PEG ratio is currently 1.25. 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 was holding an average PEG ratio of 1.43 at yesterday's closing price.

The Fiber Optics industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 107, putting it in the top 42% 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.

To follow CIEN in the coming trading sessions, be sure to utilize Zacks.com.

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