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Falling Earnings Estimates Signal Weakness Ahead for Ceragon Networks (CRNT)

Zacks Equity Research

Similar to wise buying decisions, exiting certain underperformers at the right time helps maximize portfolio returns. Selling off losers can be difficult, but if both the share price and estimates are falling, it could be time to get rid of the security before more losses hit your portfolio.

One such stock that you may want to consider dropping is Ceragon Networks Ltd. (CRNT), which has witnessed a significant price decline in the past four weeks, and it has seen negative earnings estimate revisions for the current quarter and the current year. A Zacks Rank #5 (Strong Sell) further confirms weakness in CRNT.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 1 estimate moving down in the past 30 days, compared with no upward revision. This trend has caused the consensus loss estimate to widen, going from a loss of 10 cents a share a month ago to its current loss of 45 cents.

Also, for the current quarter, Ceragon Networks has seen 1 downward estimate revision versus no revision in the opposite direction, widening the consensus loss estimate down to a loss of 12 cents a share from a loss of 4 cents over the past 30 days.   

The stock also has seen some pretty dismal trading lately, as the share price has dropped 19.5% in the past month.

So it may not be a good decision to keep this stock in your portfolio anymore, at least if you don’t have a long time horizon to wait.

If you are still interested in the same sector, you may instead consider some better-ranked stocks including TeliaSonera Aktiebolag (publ) (TLSNY), BlackBerry Limited (BBRY) and KT Corp. (KT). While TeliaSonera Aktiebolag holds a Zacks Rank #1 (Strong Buy), BlackBerry Limited and KT Corp holds a Zacks Rank #2 (Buy) and may be better selections at this time.

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CERAGON NETWORKS LTD (CRNT): Free Stock Analysis Report

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