Ciena (NYSE:CIEN), a company providing networking systems, software, and services, is set to disclose its earnings on Thursday, June 5, 2025. In the last five years, Ciena’s stock has displayed a propensity for negative one-day returns after earnings announcements. Specifically: It has recorded a negative one-day return in 55% of cases, with a median drop of -4.2%. And, the highest one-day negative return noted was -24.3%.
For traders focused on events, being aware of these historical patterns can be beneficial, even though the actual results will primarily depend on how the forthcoming earnings measure up against market consensus and expectations. There are two key strategies to consider for earnings events:
- Pre-Earnings Positioning: Evaluate the historical probabilities and establish a position prior to the earnings announcement.
- Post-Earnings Positioning: Examine the linkage between immediate and medium-term returns following the earnings release, and adjust your position as needed.
Analysts anticipate Ciena will report earnings of $0.52 per share on revenues of $1.09 billion. This represents an increase compared to the same quarter last year, when the company posted earnings of $0.27 per share on revenues of $911 million. On a fundamental level, Ciena currently has a market capitalization of $11 billion. Over the past twelve months, the company generated $4.0 billion in revenue, achieving operational profitability with $184 million in operating profits and a net income of $79 million. If you are looking for upside with less volatility than individual stocks, the Trefis High Quality portfolio offers an alternative — having outperformed the S&P 500 and achieved returns greater than 91% since its inception. Separately, see – Buy, Sell, Or Hold Pfizer Stock At $23?
See earnings reaction history of all stocks
Ciena Stock Historical Odds Of Positive Post-Earnings Return
Here are some insights on one-day (1D) post-earnings returns:
- There are 20 recorded earnings data points for the past five years, with 9 positive and 11 negative one-day (1D) returns noted. In summary, positive 1D returns occurred approximately 45% of the time.
- Interestingly, this percentage increases to 55% when analyzing data from the last 3 years instead of 5.
- The median of the 9 positive returns is 7.3%, while the median of the 11 negative returns is -4.2%
Additional information regarding observed 5-Day (5D) and 21-Day (21D) returns following earnings is summarized along with the statistics in the table below.
Ciena Stock Correlation Between 1D, 5D, and 21D Historical Returns
A relatively lower-risk strategy (though unhelpful if the correlation is weak) is to understand the correlation between short-term and medium-term returns following earnings, identify a pair with the strongest correlation, and execute the suitable trade. For instance, if 1D and 5D demonstrate the highest correlation, a trader may take a “long” position for the following 5 days if the 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D indicates the correlation between 1D post-earnings returns and the subsequent 5D returns.
Is There Any Correlation With Peer Earnings?
Occasionally, the performance of peers can impact the post-earnings reaction of a stock. In fact, the pricing-in may commence even before the earnings are announced. Below is some historical data regarding the post-earnings performance of Ciena stock, compared to the stock performance of peers reporting earnings just before Ciena. For a fair comparison, peer stock returns also represent post-earnings one-day (1D) returns.
Discover more about Trefis RV strategy, which has outperformed its all-cap stocks benchmark (a combination of all 3, the S&P 500, S&P mid-cap, and Russell 2000), delivering strong returns to investors. Additionally, if you seek upside with a smoother experience than holding an individual stock like Ciena, consider the High Quality portfolio, which has surpassed the S&P 500 and achieved returns exceeding 91% since its launch.
Read the full article here
