Please ensure Javascript is enabled for purposes of website accessibility

Why Ceragon Networks Stock Dropped Today

By Evan Niu, CFA - Feb 8, 2021 at 11:42AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The wireless technology specialist reported fourth-quarter earnings and issued lackluster guidance for 2021.

What happened

Shares of Ceragon Networks (CRNT 4.46%) dropped as much as 18% today after the company reported fourth-quarter earnings. The results were mixed compared to analyst expectations. As of 11:05 a.m. EST, the stock had partially recovered and was down 9%.

So what

Revenue in the fourth quarter came in at $74 million, ahead of the consensus estimate of $72.1 million. That translated into an adjusted net loss of $3.5 million, or $0.04 per share. Wall Street was expecting Ceragon to break even. The company said that it increased its number of 5G technology design wins from five to nine during the quarter.

A city with 5G connection links hovering above multiple buildings

Image source: Getty Images.

"Given the mass exodus to remote work, back-to-back lockdowns, and reduced travel, online services have become more important and in-demand than ever before," CEO Ira Palti said in a statement. "Fueled by this 'new normal,' there arose a strong global demand for connectivity which drove telcos to accelerate their evolution to 5G."

Now what

Ceragon expects to complete tape-out (finalizing the design process) of its advanced 5G hauling chipset in the first half of 2021. In terms of guidance, the company expects revenue in 2021 to be in the range of $275 million to $295 million, which would represent 5% to 12% growth compared to the $262.9 million in sales that it generated in 2020. However, the midpoint of that outlook is below the $289.2 million in revenue that analysts are modeling for.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Ceragon Networks Ltd. Stock Quote
Ceragon Networks Ltd.
CRNT
$1.64 (4.46%) $0.07

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
322%
 
S&P 500 Returns
116%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.