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Cisco Systems (CSCO) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Cisco Systems (CSCO) closed the most recent trading day at $46.84, moving +0.97% from the previous trading session. This change outpaced the S&P 500's 0.91% gain on the day. Elsewhere, the Dow gained 0.7%, while the tech-heavy Nasdaq added 1.02%.

Prior to today's trading, shares of the seller of routers, switches, software and services had lost 5.73% over the past month. This has lagged the Computer and Technology sector's loss of 2.58% and the S&P 500's loss of 2.74% in that time.

CSCO will be looking to display strength as it nears its next earnings release. On that day, CSCO is projected to report earnings of $0.81 per share, which would represent year-over-year growth of 8%. Meanwhile, our latest consensus estimate is calling for revenue of $13.07 billion, down 0.02% from the prior-year quarter.

CSCO's full-year Zacks Consensus Estimates are calling for earnings of $3.36 per share and revenue of $52.90 billion. These results would represent year-over-year changes of +8.39% and +1.92%, respectively.

Investors should also note any recent changes to analyst estimates for CSCO. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.59% lower. CSCO is currently a Zacks Rank #3 (Hold).

Investors should also note CSCO's current valuation metrics, including its Forward P/E ratio of 13.83. This represents a discount compared to its industry's average Forward P/E of 14.87.

Meanwhile, CSCO's PEG ratio is currently 2.03. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Computer - Networking industry currently had an average PEG ratio of 2.04 as of yesterday's close.

The Computer - Networking industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 34, putting it in the top 14% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow CSCO in the coming trading sessions, be sure to utilize Zacks.com.


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