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

Zacks Equity Research
·3 mins read

Ciena (CIEN) closed at $41.81 in the latest trading session, marking a -0.71% move from the prior day. This change lagged the S&P 500's 0.01% gain on the day. Elsewhere, the Dow gained 0.39%, while the tech-heavy Nasdaq lost 0.36%.

Prior to today's trading, shares of the developer of high-speed networking technology had gained 2.38% over the past month. This has lagged the Computer and Technology sector's gain of 4.31% and the S&P 500's gain of 2.55% 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 $0.63, up 8.62% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $828.61 million, down 14.4% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.98 per share and revenue of $3.53 billion, which would represent changes of +41.23% and -1.15%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for CIEN. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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. Within the past 30 days, our consensus EPS projection has moved 0.67% lower. CIEN is currently a Zacks Rank #4 (Sell).

In terms of valuation, CIEN is currently trading at a Forward P/E ratio of 14.15. Its industry sports an average Forward P/E of 14.15, so we one might conclude that CIEN is trading at a no noticeable deviation comparatively.

Investors should also note that CIEN has a PEG ratio of 0.88 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CIEN's industry had an average PEG ratio of 0.88 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 246, which puts it in the bottom 3% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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