Ceragon (CRNT) Moves to Buy: Rationale Behind the Upgrade

Core Viewpoint - Ceragon Networks (CRNT) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling pressure that affects stock prices [4]. Recent Performance and Projections - For the fiscal year ending December 2024, Ceragon is expected to earn $0.32 per share, reflecting a 60% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Ceragon has risen by 31.3%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - Ceragon's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [11].