Ciena Corporation Beat Analyst Estimates: See What The Consensus Is Forecasting For Next Year

NYSE:CIEN) released its quarterly result to the market. The early response was not positive, with shares down 8.4% to US$40.58 in the past week. It looks like a credible result overall – although revenues of US$977m were what the analysts expected, Ciena surprised by delivering a (statutory) profit of US$0.91 per share, an impressive 27% above what was forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.” data-reactid=”28″>Last week, you might have seen that Ciena Corporation (NYSE:CIEN) released its quarterly result to the market. The early response was not positive, with shares down 8.4% to US$40.58 in the past week. It looks like a credible result overall – although revenues of US$977m were what the analysts expected, Ciena surprised by delivering a (statutory) profit of US$0.91 per share, an impressive 27% above what was forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Ciena ” data-reactid=”29″> See our latest analysis for Ciena

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Taking into account the latest results, the 17 analysts covering Ciena provided consensus estimates of US$3.59b revenue in 2021, which would reflect a discernible 2.1% decline on its sales over the past 12 months. Statutory earnings per share are expected to reduce 7.7% to US$2.25 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$3.97b and earnings per share (EPS) of US$2.83 in 2021. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a pretty serious reduction to earnings per share numbers.

The consensus price target fell 12% to US$54.37, with the weaker earnings outlook clearly leading valuation estimates. That’s not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Ciena, with the most bullish analyst valuing it at US$66.00 and the most bearish at US$42.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Ciena shareholders.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with the forecast 2.1% revenue decline a notable change from historical growth of 9.4% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.1% annually for the foreseeable future. It’s pretty clear that Ciena’s revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Ciena. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

see them free on our platform here..” data-reactid=”51″>With that in mind, we wouldn’t be too quick to come to a conclusion on Ciena. Long-term earnings power is much more important than next year’s profits. At Simply Wall St, we have a full range of analyst estimates for Ciena going out to 2022, and you can see them free on our platform here..