Trade-Ideas: Ciena (CIEN) Is Today's Post-Market Leader Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Ciena ( CIEN) as a post-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Ciena as such a stock due to the following factors:

  • CIEN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $96.0 million.
  • CIEN is up 2.1% today from today's close.

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More details on CIEN:

Ciena Corporation provides communications networking equipment, software, and services that support the transport, switching, aggregation, and management of voice, video, and data traffic worldwide. Currently there are 14 analysts that rate Ciena a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Ciena has been 3.0 million shares per day over the past 30 days. Ciena has a market cap of $2.0 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 1.62 and a short float of 30.3% with 3.75 days to cover. Shares are down 18.9% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Ciena as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 3.3%. Since the same quarter one year prior, revenues rose by 12.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CIENA CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CIENA CORP continued to lose money by earning -$0.84 versus -$1.46 in the prior year. This year, the market expects an improvement in earnings ($0.95 versus -$0.84).
  • 41.91% is the gross profit margin for CIENA CORP which we consider to be strong. Regardless of CIEN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CIEN's net profit margin of 2.67% is significantly lower than the industry average.
  • CIEN has underperformed the S&P 500 Index, declining 21.37% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

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