Earnings Previews: Ciena, GameStop, Hormel

This week’s earnings reports calendar is not very populated. Barely 100 companies are scheduled to disclose results this week, and the count drops even lower the closer we get to Christmas.

After markets close Tuesday, we’ll hear from two companies of interest, and another will be reporting before markets open on Wednesday: Stitch Fix, Toll Brothers and Campbell Soup.

Here’s a look at three more companies set to report results after markets close Wednesday and before they open on Thursday.

Ciena

Network hardware and software maker Ciena Corp. (NYSE: CIEN) reports fourth-quarter fiscal 2021 results before markets open Thursday. Over the past 12 months, Ciena’s stock has added about 34%, including a 13% drop in the first three weeks of September. Since then, the stock has added more than 20%.

Last month, Ciena announced a collaboration with Samsung to deliver “the next-generation of high-bandwidth applications and services driven by expanding 5G networks.” That, probably more than anything else (the S&P 500 is up about 4.5% in the same period), is the reason for Ciena’s share price increase.

Analysts are solidly bullish on the stock, with 13 of 16 giving the shares a rating of Buy or Strong Buy and the rest have put Hold ratings. At a recent price of around $63.30 a share, the upside potential based on a median price target of $67 is 5.8%. At the high price target of $80, the upside potential is more than 26%.

For the company’s fiscal fourth quarter, analysts have forecast revenue of $1.02 billion, which would be up 3.7% sequentially and 23% higher year over year. Adjusted earnings per share (EPS) are forecast at $2.92, down 7% sequentially but up nearly 42% year over year. For the full fiscal year, Ciena is expected to report EPS of $2.92, down 1%, on sales of $3.6 billion, up 2%.

Ciena’s share price to earnings multiple for fiscal 2021 is 21.7. For fiscal 2022, the multiple to estimated EPS of $3.14 is 20.2, and for 2023, it is 18.0-times estimated EPS of $3.53. The stock’s 52-week range is $43.63 to $63.12. The high was posted early Tuesday. Ciena does not pay a dividend. Total shareholder return for the past year was nearly 31%.

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GameStop

Since GameStop Corp. (NYSE: GME) stock skyrocketed in late January, it has given back more than half of its share price gain. That means it currently trades about 1,000% higher than its share price 12 months ago.

Except for continued strong interest in the stock by some retail investors, however, GameStop’s fundamentals probably haven’t changed much and may have gotten a bit worse given the supply issues facing gaming console makers like Microsoft and Sony. Analysts and some investors are still waiting for GameStop to reveal its turnaround plan. Maybe Wednesday afternoon, when the company reports third-quarter results, will be the day.

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