what happened
Shares of Israeli Wireless Recovery Company Ceragon Networks (NASDAQ: CRNT) rose like a rocket on Friday, rising 54% without any news.
Approximately
Serious. Check out the news threads. There is no look at Ceragon – no analyst upgrades, no press releases, nothing. It’s a earnings season and you might think that ‘earnings’ is the reason why Ceragon’s stock is higher, but Ceragonsay earnings only pay out February 8th.
So why is Ceragon stock? One word: Twitter. On the social networking site, traders talk about Ceragon shares, refer to it as a ‘5g play’ and ‘about to go’ and say ‘a yuber said it’s a good stock to buy . ‘
Image Source: Getty Images.
Now what
In other words, the Ceragon stock rose today simply because it rose, and some traders noticed the trend and strengthened it.
But Ceragon’s sales are still down – by 12% in the first three quarters of 2020 – and not just because of Covid. The fact is that Ceragon’s sales also declined last year and fell by 17% from the 2018 level. While “5G” may offer improvement going forward, Wall Street analysts who follow this stock predict that Ceragon’s sales will decline by 9% by 2020 (and with a huge GAAP loss of $ 0.15 per share). Growth is likely to return in 2021, but the truth is that it is unlikely to be the kind of growth to justify a 50% rise in the share price as we see it today.