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Price Over Earnings Overview: Ciena

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Benzinga Insights
·2 min read
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Looking into the current session, Ciena Inc. (NYSE:CIEN) is trading at $48.85, after a 0.1% drop. Over the past month, the stock fell by 11.71%, but over the past year, it actually went up by 26.16%. With questionable short-term performance like this, and great long-term performance, long-term shareholders might want to start looking into the company's price-to-earnings ratio.

Assuming that all other factors are held constant, this could present itself as an opportunity for shareholders trying to capitalize on the higher share price. The stock is currently below from its 52 week high by 20.59%.

Price Candles
Price Candles

The P/E ratio is used by long-term shareholders to assess the company's market performance against aggregate market data, historical earnings, and the industry at large. A lower P/E indicates that shareholders do not expect the stock to perform better in the future, and that the company is probably undervalued. It shows that shareholders are less than willing to pay a high share price, because they do not expect the company to exhibit growth, in terms of future earnings.

View more earnings on CIEN

Most often, an industry will prevail in a particular phase of a business cycle, than other industries.

Compared to the aggregate P/E ratio of the 49.9 in the Communications Equipment industry, Ciena Inc. has a lower P/E ratio of 21.06. Shareholders might be inclined to think that the stock might perform worse than its industry peers. It's also possible that the stock is undervalued.

Price Candles
Price Candles

Price to earnings ratio is not always a great indicator of the company's performance. Depending on the earnings makeup of a company, investors can become unable to attain key insights from trailing earnings.

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