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

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Cisco Systems (CSCO - Free Report) closed at $46.53 in the latest trading session, marking a +1.22% move from the prior day. This move outpaced the S&P 500's daily gain of 0.73%. Meanwhile, the Dow gained 0.51%, and the Nasdaq, a tech-heavy index, added 1.34%.

Prior to today's trading, shares of the seller of routers, switches, software and services had lost 5.06% over the past month. This has lagged the Computer and Technology sector's gain of 2.97% and the S&P 500's of 0% in that time.

Wall Street will be looking for positivity from CSCO as it approaches its next earnings report date. This is expected to be February 12, 2020. On that day, CSCO is projected to report earnings of $0.76 per share, which would represent year-over-year growth of 4.11%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $11.99 billion, down 3.7% from the year-ago period.

CSCO's full-year Zacks Consensus Estimates are calling for earnings of $3.25 per share and revenue of $51.06 billion. These results would represent year-over-year changes of +4.84% and -1.62%, respectively.

Investors might also notice recent changes to analyst estimates for CSCO. These recent revisions tend to reflect the evolving nature of short-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).

In terms of valuation, CSCO is currently trading at a Forward P/E ratio of 14.14. This represents a discount compared to its industry's average Forward P/E of 15.75.

Investors should also note that CSCO has a PEG ratio of 2.41 right now. 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. The Computer - Networking was holding an average PEG ratio of 2.41 at yesterday's closing price.

The Computer - Networking industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 84, which puts it in the top 33% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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