Back to top

Image: Bigstock

Ciena (CIEN) Gains But Lags Market: What You Should Know

Read MoreHide Full Article

Ciena (CIEN - Free Report) closed the most recent trading day at $43.22, moving +0.36% from the previous trading session. This move lagged the S&P 500's daily gain of 1.5%. Meanwhile, the Dow gained 1.48%, and the Nasdaq, a tech-heavy index, added 1.95%.

Coming into today, shares of the developer of high-speed networking technology had lost 2.53% in the past month. In that same time, the Computer and Technology sector lost 4.12%, while the S&P 500 lost 4.19%.

Wall Street will be looking for positivity from CIEN as it approaches its next earnings report date. This is expected to be September 5, 2019. In that report, analysts expect CIEN to post earnings of $0.57 per share. This would mark year-over-year growth of 18.75%. Our most recent consensus estimate is calling for quarterly revenue of $930.51 million, up 13.64% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2 per share and revenue of $3.53 billion. These totals would mark changes of +43.88% and +14.02%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for CIEN. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.76% higher. CIEN is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that CIEN has a Forward P/E ratio of 21.5 right now. For comparison, its industry has an average Forward P/E of 20.41, which means CIEN is trading at a premium to the group.

We can also see that CIEN currently has a PEG ratio of 1.24. 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. The Fiber Optics was holding an average PEG ratio of 1.43 at yesterday's closing price.

The Fiber Optics industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 221, which puts it in the bottom 14% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Ciena Corporation (CIEN) - free report >>

Published in