Ciena Stock Hits Record High On Upbeat Guidance, Despite Q4 Earnings Miss: Debate Spikes Retail Chatter To Annual Highs

Shares of Ciena Corp. were up over 15% in midday trade on Wednesday despite the company’s missing fourth-quarter earnings estimates.

If these gains hold, the stock will hit its highest level since Feb. 2002.

Ciena's stock movement year-to-date. | Source: TradingView

 

The day marked significant volatility for the stock, with the shares initially dipping in pre-market trading due to the earnings miss but rebounding over 23% thereafter following management’s upbeat guidance during the earnings call.

Ciena’s revenue was largely in-line with expectations of $1.1 billion, compared to the expected $1.1 billion. However, the optical networking equipment maker reported earnings of $0.54 per share, missing Wall Street’s expectation of $0.65.

Gross margins also slid to 40.9% from 43.1% year-over-year. 

"Our Q4 revenue and strong order flow reflect our significant and increasing technology leadership and positive industry dynamics," said Cienna CEO Gary Smith. 

"As Cloud and AI drive bandwidth demand across the network, we are positioned for accelerated revenue growth and market share expansion moving forward," he added.

For its first fiscal quarter, the company expects revenue of $1.01 billion to $1.9 billion.

Ciena also forecast average annual revenue growth of about 8% to 11% over the next three years during its earnings call. 

Ciena Corp. Sentiment and Message Volume on Dec 12 as of 12:25 p.m. ET | Source: Stocktwits

Retail sentiment around the stock has improved to ‘bullish’ from ‘neutral’ three months ago, with its shares gaining 56% during the same period. 

Sentiment is being dragged down by some users who continue to be bearish on the company’s earnings miss, citing that upbeat guidance doesn’t promise better financial performance.

The debate between the two sides has led to retail chatter around the stock, which hit an annual peak of 96 at ‘extremely high’ levels. 

Ciena Corp. Sentiment and Message Volume on Dec 12 as of 12:25 p.m. ET | Source: Stocktwits

The stock is on pace for largest percent increase since Jun. 6, 2019, when it rose 26.78%, according to Dow Jones Newswire. 

So far this year, Ciena’s shares have surged by over 85%. 

For updates and corrections, email newsroom[at]stocktwits[dot]com.<

Read also: Nucor, Steel Dynamics, Commercial Metals Stocks Slip On UBS Downgrade: Retail Still Upbeat