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Cisco Systems (CSCO) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Cisco Systems (CSCO - Free Report) closed at $52.76, marking a -0.94% move from the previous day. This change lagged the S&P 500's 0.11% loss on the day.

Prior to today's trading, shares of the seller of routers, switches, software and services had lost 0.09% over the past month. This has lagged the Computer and Technology sector's gain of 7.15% and the S&P 500's gain of 2.23% in that time.

Investors will be hoping for strength from CSCO as it approaches its next earnings release. The company is expected to report EPS of $0.82, up 2.5% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $13.04 billion, up 7.25% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.20 per share and revenue of $49.67 billion, which would represent changes of -0.31% and +0.75%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for CSCO. Recent revisions tend to reflect the latest 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. 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.

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. Within the past 30 days, our consensus EPS projection remained stagnant. CSCO is holding a Zacks Rank of #4 (Sell) right now.

Valuation is also important, so investors should note that CSCO has a Forward P/E ratio of 16.63 right now. Its industry sports an average Forward P/E of 18.27, so we one might conclude that CSCO is trading at a discount comparatively.

Meanwhile, CSCO's PEG ratio is currently 2.66. 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. The Computer - Networking industry currently had an average PEG ratio of 3.38 as of yesterday's close.

The Computer - Networking industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 224, which puts it in the bottom 12% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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