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

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In the latest trading session, Cisco Systems (CSCO - Free Report) closed at $53.70, marking a +0.09% move from the previous day. This change outpaced the S&P 500's 0.75% loss on the day.

Heading into today, shares of the seller of routers, switches, software and services had gained 0.98% over the past month, lagging the Computer and Technology sector's gain of 3.03% and the S&P 500's gain of 2.74% in that time.

CSCO will be looking to display strength as it nears its next earnings release, which is expected to be August 18, 2021. On that day, CSCO is projected to report earnings of $0.82 per share, which would represent year-over-year growth of 2.5%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $13.04 billion, up 7.25% from the year-ago period.

CSCO's full-year Zacks Consensus Estimates are calling for earnings of $3.20 per share and revenue of $49.67 billion. These results would represent year-over-year changes of -0.31% and +0.75%, respectively.

It is also important to note the recent changes to analyst estimates for CSCO. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. CSCO currently has a Zacks Rank of #4 (Sell).

Digging into valuation, CSCO currently has a Forward P/E ratio of 16.75. For comparison, its industry has an average Forward P/E of 15.89, which means CSCO is trading at a premium to the group.

It is also worth noting that CSCO currently has a PEG ratio of 2.68. 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. CSCO's industry had an average PEG ratio of 3.37 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 209, putting it in the bottom 18% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

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


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