Why Ceragon Networks stock jumped 54% on Friday

What happened

Shares of the Israeli wireless company Ceragon Networks (NASDAQ: CRNT) took off like a rocket on Friday, increasing 54% without any news.

So what

Seriously. Consult the newswires. There’s no preview on Ceragon – no analyst upgrades, no press releases, nothing. It’s earnings season and you might think “profits” are the reason Ceragon stock is up, but Ceragonof revenues are not due until February 8.

So why is Ceragon in stock? A word: Twitter. On the social networking site, traders are talking about the Ceragon stock, touting it as a “5g game” and “about to go” and saying “a YouTuber said it was a good stock to buy”.

Now what

In other words, Ceragon stock rose today simply because it rose, and a few traders noticed the trend and amplified it.

But Ceragon sales continue to decline – by 12% in the first three quarters of 2020 – and not just because of Covid either. The point is, Ceragon’s sales were also down last year, dropping 17% from 2018 levels. While “5G” may bring improvement in the future, Wall Street analysts following this shares predict that Ceragon sales will end 2020 down 9% (and with a loss of $ 0.15 per share). Growth could return in 2021, but the truth is, it probably won’t be the kind of growth that justifies a 50% rally in stock prices as we see today.