Ciena Corp (CIEN) recently beat the Zacks Consensus Estimate on the top and bottom lines, but guidance for the next quarter was below expectations and the stock saw estimates fall. That helped push the stock to a Zacks Rank #5 (Strong Sell) but a deeper look at the report may give us some valuable insights.
Earnings Report
The company earned $0.51 when $0.49 was expected and posted revenues of $728M when $726M was expected. Those numbers are good, but the stock market cares more about what you will do as opposed to what you have done.
The company guided next quarter to revenues of $720M -$750M and that is below the $770M consensus at the time fo the report.
Stocks in this market are "priced for perfection" and when you disappoint in anyway, your stock can get hit hard. CIEN found that out as the stock immediately fell 5% in the premarket and continued lower by more than 11% in the session following the report.
Earnings Ahead
The company is set to report earnings again soon, December 7 to be exact. The Zacks Consensus Estimate is calling for $739M on top and $0.51 on the bottom line.
Other stocks in the same sector have been seen some weakness with AAOI in particular having some issues.
There have also been a lot of put buyers on CIEN of late. At least two times in the last 3 weeks this stock was highlighted as one that had notable action in the options market.
Options Market
In looking at the at the market straddle, I see a potential move of more than 9% being priced in for CIEN. Three of the last four quarters the stock has moved more than what the options market has priced in. Seeing as we are near the highs, the best bet would be to wait and see what happens in this sector over the next week or so. A straddle placed just an hour or so before the close prior to the report is one potential given what I am seeing.
Chart
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Bear Of The Day: Ciena Corporation (CIEN)
Ciena Corp (CIEN) recently beat the Zacks Consensus Estimate on the top and bottom lines, but guidance for the next quarter was below expectations and the stock saw estimates fall. That helped push the stock to a Zacks Rank #5 (Strong Sell) but a deeper look at the report may give us some valuable insights.
Earnings Report
The company earned $0.51 when $0.49 was expected and posted revenues of $728M when $726M was expected. Those numbers are good, but the stock market cares more about what you will do as opposed to what you have done.
The company guided next quarter to revenues of $720M -$750M and that is below the $770M consensus at the time fo the report.
Stocks in this market are "priced for perfection" and when you disappoint in anyway, your stock can get hit hard. CIEN found that out as the stock immediately fell 5% in the premarket and continued lower by more than 11% in the session following the report.
Earnings Ahead
The company is set to report earnings again soon, December 7 to be exact. The Zacks Consensus Estimate is calling for $739M on top and $0.51 on the bottom line.
Other stocks in the same sector have been seen some weakness with AAOI in particular having some issues.
There have also been a lot of put buyers on CIEN of late. At least two times in the last 3 weeks this stock was highlighted as one that had notable action in the options market.
Options Market
In looking at the at the market straddle, I see a potential move of more than 9% being priced in for CIEN. Three of the last four quarters the stock has moved more than what the options market has priced in. Seeing as we are near the highs, the best bet would be to wait and see what happens in this sector over the next week or so. A straddle placed just an hour or so before the close prior to the report is one potential given what I am seeing.
Chart
Ciena Corporation Price and Consensus
Ciena Corporation Price and Consensus | Ciena Corporation Quote
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>