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

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Cisco Systems (CSCO - Free Report) closed at $44.48 in the latest trading session, marking a -0.36% move from the prior day. This move lagged the S&P 500's daily gain of 0.13%. At the same time, the Dow added 0.24%, and the tech-heavy Nasdaq gained 0.15%.

Heading into today, shares of the seller of routers, switches, software and services had gained 2.53% over the past month, lagging the Computer and Technology sector's gain of 4.54% and the S&P 500's gain of 2.59% in that time.

Wall Street will be looking for positivity from CSCO as it approaches its next earnings report date. On that day, CSCO is projected to report earnings of $0.76 per share, which would represent a year-over-year decline of 1.3%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $11.91 billion, down 0.8% from the year-ago period.

CSCO's full-year Zacks Consensus Estimates are calling for earnings of $3.17 per share and revenue of $48.76 billion. These results would represent year-over-year changes of -1.25% and -1.09%, respectively.

Any recent changes to analyst estimates for CSCO should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. CSCO is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that CSCO has a Forward P/E ratio of 14.07 right now. This represents a discount compared to its industry's average Forward P/E of 17.1.

We can also see that CSCO currently has a PEG ratio of 2.25. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Computer - Networking stocks are, on average, holding a PEG ratio of 3.02 based on yesterday's closing prices.

The Computer - Networking industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 66, putting it in the top 26% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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