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Cisco Systems (CSCO) Gains But Lags Market: What You Should Know

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In the latest trading session, Cisco Systems (CSCO - Free Report) closed at $45.81, marking a +0.39% move from the previous day. This move lagged the S&P 500's daily gain of 0.78%. At the same time, the Dow added 0.68%, and the tech-heavy Nasdaq gained 1.44%.

Prior to today's trading, shares of the seller of routers, switches, software and services had lost 5.04% over the past month. This has lagged the Computer and Technology sector's gain of 4.97% and the S&P 500's loss of 1.32% in that time.

CSCO will be looking to display strength as it nears its next earnings release. In that report, analysts expect CSCO to post earnings of $0.74 per share. This would mark a year-over-year decline of 10.84%. Our most recent consensus estimate is calling for quarterly revenue of $12.09 billion, down 9.94% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.15 per share and revenue of $49.24 billion, which would represent changes of +1.61% and -5.13%, respectively, from the prior year.

Any recent changes to analyst estimates for CSCO should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.04% higher within the past month. CSCO is currently a Zacks Rank #3 (Hold).

In terms of valuation, CSCO is currently trading at a Forward P/E ratio of 14.51. This valuation marks a discount compared to its industry's average Forward P/E of 16.72.

Meanwhile, CSCO's PEG ratio is currently 2.69. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CSCO's industry had an average PEG ratio of 3 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 165, putting it in the bottom 36% 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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