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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 $62.12 in the latest trading session, marking a -0.4% move from the prior day. This move lagged the S&P 500's daily gain of 0.28%. Elsewhere, the Dow gained 0.11%, while the tech-heavy Nasdaq added 0.14%.

Heading into today, shares of the seller of routers, switches, software and services had gained 7.96% over the past month, outpacing the Computer and Technology sector's loss of 4.59% and the S&P 500's gain of 0.12% in that time.

Wall Street will be looking for positivity from Cisco Systems as it approaches its next earnings report date. The company is expected to report EPS of $0.81, up 2.53% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $12.65 billion, up 5.77% from the prior-year quarter.

CSCO's full-year Zacks Consensus Estimates are calling for earnings of $3.42 per share and revenue of $52.67 billion. These results would represent year-over-year changes of +6.21% and +5.72%, respectively.

Any recent changes to analyst estimates for Cisco Systems should also be noted by investors. 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.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. Cisco Systems is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that Cisco Systems has a Forward P/E ratio of 18.25 right now. Its industry sports an average Forward P/E of 18.57, so we one might conclude that Cisco Systems is trading at a discount comparatively.

It is also worth noting that CSCO currently has a PEG ratio of 2.81. 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. The Computer - Networking was holding an average PEG ratio of 2.81 at yesterday's closing price.

The Computer - Networking industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 79, putting it in the top 31% 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.

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


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