NEW YORK (TheStreet) -- Shares of Infinera (INFN) - Get Report are tumbling 33.49% to $8.32 on high trading volume today after releasing 2016 second quarter financial results yesterday and a gloomy third quarter forecast.
Over 17.72 million shares of the company have traded so far today vs. the stock's average of 2.65 million.
In its earnings report, Infinera warned that demand for its products may be "softening," prompting several firms to downgrade the company on the guidance.
However, the Sunnyvale, CA-based fiber-optic networking equipment company reported earnings of 21 cents per share, topping estimates of 18 cents. Non-GAAP revenue for the quarter was $259 million, above Wall Street's $256 million consensus.
Analysts at Needham & Co. released a bullish note today that maintained the firm's "strong buy" rating but trimmed its price target on the stock to $15 from $20.
"We are going to hold our nose and ride out the trip to the sewers; we think much of this is temporary," the firm added in a note cited by Barron's.
Needham said that while some of the issues Infinera faces are company-specific, there are also industry-wide concerns to consider, particularly pricing.
"Clearly this is an industry-wide shift," the firm said.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rated this stock as a "hold" with a ratings score of C+.
The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, TheStreet Ratings also finds weaknesses including a generally disappointing performance in the stock itself, weak operating cash flow and unimpressive growth in net income.
You can view the full analysis from the report here: INFN