Ciena (NYSE:CIEN) Stock Falls 7% - What's Next?

Key Points

• Ciena shares fell 7% to about $331, with trading volume roughly 10% above its average.
• Despite the sell-off, analysts remain positive: Ciena has a “Moderate Buy” consensus rating and an average price target of $506.11, well above the current price.
• The company recently exceeded quarterly expectations, reporting $2.11 in EPS versus $1.73 expected and $1.67 billion in revenue, up 37% year over year; however, insiders have sold about $12 million of stock over the past 90 days.

Shares of Ciena Corporation (NYSE:CIEN - Get Free Report) dropped 7% during trading on Friday. The company traded as low as $330.99 and last traded at $331.7330. Approximately 3,184,229 shares changed hands during mid-day trading, an increase of 10% from the average daily volume of 2,901,611 shares. The stock had previously closed at $356.52.

Wall Street Analysts Forecast Growth

A number of research analysts have issued reports on the stock. Rosenblatt Securities restated a "buy" rating and set a $525.00 price target on shares of Ciena in a research note on Thursday, September 17th. Citigroup reissued a "buy" rating on shares of Ciena in a report on Friday, September 4th. Bank of America reissued a "buy" rating on shares of Ciena in a report on Thursday, August 20th. Evercore raised Ciena from an "in-line" rating to an "outperform" rating and set a $550.00 target price on the stock in a research report on Monday, September 21st. Finally, Morgan Stanley restated a "positive" rating on shares of Ciena in a research note on Thursday, September 17th. One research analyst has rated the stock with a Strong Buy rating, fourteen have assigned a Buy rating and five have assigned a Hold rating to the stock. According to MarketBeat, the company presently has an average rating of "Moderate Buy" and a consensus target price of $506.11.

Ciena Price Performance

The stock has a market cap of $47.04 billion, a price-to-earnings ratio of 74.05, a price-to-earnings-growth ratio of 5.00 and a beta of 1.28. The stock's 50 day moving average price is $377.70 and its two-hundred day moving average price is $441.03. The company has a quick ratio of 3.17, a current ratio of 3.80 and a debt-to-equity ratio of 1.06.

Ciena (NYSE:CIEN - Get Free Report) last issued its earnings results on Thursday, September 3rd. The communications equipment provider reported $2.11 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.73 by $0.38. The firm had revenue of $1.67 billion during the quarter, compared to analysts' expectations of $1.64 billion. Ciena had a net margin of 10.87% and a return on equity of 25.33%. The firm's revenue was up 37.0% compared to the same quarter last year. During the same quarter last year, the company posted $0.35 earnings per share. Equities research analysts forecast that Ciena Corporation will post 6.00 EPS for the current fiscal year.

Insider Activity

In related news, EVP Joseph Cumello sold 1,586 shares of Ciena stock in a transaction that occurred on Friday, September 25th. The stock was sold at an average price of $358.52, for a total transaction of $568,612.72. Following the completion of the transaction, the executive vice president directly owned 39,570 shares in the company, valued at approximately $14,186,636.40. This trade represents a 3.85% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Bruce L. Claflin sold 2,857 shares of the business's stock in a transaction that occurred on Thursday, September 24th. The shares were sold at an average price of $355.91, for a total value of $1,016,834.87. Following the completion of the transaction, the director directly owned 8,279 shares of the company's stock, valued at $2,946,578.89. The trade was a 25.66% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold 31,862 shares of company stock valued at $12,017,320 over the last 90 days. Company insiders own 0.58% of the company's stock.

Hedge Funds Weigh In On Ciena

Several institutional investors have recently made changes to their positions in the company. SmartHarvest Portfolios LLC lifted its holdings in shares of Ciena by 1.8% during the 1st quarter. SmartHarvest Portfolios LLC now owns 1,142 shares of the communications equipment provider's stock valued at $443,000 after purchasing an additional 20 shares in the last quarter. Carolina Wealth Advisors LLC grew its position in shares of Ciena by 57.8% in the 2nd quarter. Carolina Wealth Advisors LLC now owns 71 shares of the communications equipment provider's stock valued at $35,000 after purchasing an additional 26 shares during the period. Triumph Capital Management increased its stake in Ciena by 15.2% during the 2nd quarter. Triumph Capital Management now owns 205 shares of the communications equipment provider's stock worth $101,000 after purchasing an additional 27 shares in the last quarter. Syon Capital LLC increased its stake in Ciena by 3.1% during the 2nd quarter. Syon Capital LLC now owns 910 shares of the communications equipment provider's stock worth $446,000 after purchasing an additional 27 shares in the last quarter. Finally, Modera Wealth Management LLC increased its stake in Ciena by 1.8% during the 1st quarter. Modera Wealth Management LLC now owns 1,685 shares of the communications equipment provider's stock worth $654,000 after purchasing an additional 29 shares in the last quarter. 91.99% of the stock is owned by hedge funds and other institutional investors.

Ciena Company Profile

Ciena Corporation is a networking technology company that provides communications infrastructure, software and services for telecommunications providers, cloud operators, enterprises, governments and research institutions. Its solutions are designed to help organizations build, manage and automate high-capacity networks that support applications such as cloud computing, broadband connectivity, data center interconnection and 5G services.

The company's portfolio includes optical networking systems and coherent optical technologies, routing and switching platforms, broadband access solutions, network management software and professional services.

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