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Ciena (CIEN) Moves 7.3% Higher: Will This Strength Last?
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Ciena (CIEN - Free Report) shares soared 7.3% in the last trading session to close at $58.38. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 6% gain over the past four weeks.
CIEN’s rally is driven by the company’s better-than-expected second-quarter fiscal 2021 results, wherein the top and bottom lines surpassed the respective Zacks Consensus Estimate of $828 million and 48 cents per share. Although the company witnessed year-over-year fall in revenues, positive indicators like improvement in customer spending, strong order flow, backlog growth and increased deployments on the back of a robust demand environment acted as major tailwinds. In fact, reduced dependency on Huawei equipment and higher revenues from India amid the COVID resurgence played a major role in shaping Ciena’s results. Encouraged by such healthy business fundamentals and diligent operational execution, the company remains focused on retaining its leadership position in the global market.
Price and Consensus
This developer of high-speed networking technology is expected to post quarterly earnings of $0.48 per share in its upcoming report, which represents a year-over-year change of -36.8%. Revenues are expected to be $827.65 million, down 7.4% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Ciena, the consensus EPS estimate for the quarter has been revised 1% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on CIEN going forward to see if this recent jump can turn into more strength down the road.
Image: Bigstock
Ciena (CIEN) Moves 7.3% Higher: Will This Strength Last?
Ciena (CIEN - Free Report) shares soared 7.3% in the last trading session to close at $58.38. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 6% gain over the past four weeks.
CIEN’s rally is driven by the company’s better-than-expected second-quarter fiscal 2021 results, wherein the top and bottom lines surpassed the respective Zacks Consensus Estimate of $828 million and 48 cents per share. Although the company witnessed year-over-year fall in revenues, positive indicators like improvement in customer spending, strong order flow, backlog growth and increased deployments on the back of a robust demand environment acted as major tailwinds. In fact, reduced dependency on Huawei equipment and higher revenues from India amid the COVID resurgence played a major role in shaping Ciena’s results. Encouraged by such healthy business fundamentals and diligent operational execution, the company remains focused on retaining its leadership position in the global market.
Price and Consensus
This developer of high-speed networking technology is expected to post quarterly earnings of $0.48 per share in its upcoming report, which represents a year-over-year change of -36.8%. Revenues are expected to be $827.65 million, down 7.4% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Ciena, the consensus EPS estimate for the quarter has been revised 1% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on CIEN going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>