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

Ciena (CIEN) closed at $45.59 in the latest trading session, marking a +1.11% move from the prior day. This move lagged the S&P 500's daily gain of 1.96%. At the same time, the Dow added 1.57%, and the tech-heavy Nasdaq lost 3.03%.

Coming into today, shares of the developer of high-speed networking technology had lost 12.14% in the past month. In that same time, the Computer and Technology sector lost 0.91%, while the S&P 500 gained 2.19%.

Ciena will be looking to display strength as it nears its next earnings release. On that day, Ciena is projected to report earnings of $0.60 per share, which would represent year-over-year growth of 20%. Meanwhile, our latest consensus estimate is calling for revenue of $1.08 billion, up 13.76% from the prior-year quarter.

CIEN's full-year Zacks Consensus Estimates are calling for earnings of $2.84 per share and revenue of $4.4 billion. These results would represent year-over-year changes of +49.47% and +21.25%, respectively.

Investors should also note any recent changes to analyst estimates for Ciena. These recent revisions tend to reflect the evolving nature of short-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 remained stagnant. Ciena is holding a Zacks Rank of #2 (Buy) right now.

Valuation is also important, so investors should note that Ciena has a Forward P/E ratio of 15.86 right now. This represents a no noticeable deviation compared to its industry's average Forward P/E of 15.86.

Investors should also note that CIEN has a PEG ratio of 1.06 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Fiber Optics stocks are, on average, holding a PEG ratio of 1.06 based on yesterday's closing prices.

The Fiber Optics industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 3, which puts it in the top 2% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

To follow CIEN in the coming trading sessions, be sure to utilize Zacks.com.

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Ciena Corporation (CIEN) : Free Stock Analysis Report

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