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

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Cisco Systems (CSCO) closed the most recent trading day at $41.20, moving -1.29% from the previous trading session. This move lagged the S&P 500's daily gain of 1.45%. Meanwhile, the Dow gained 1.22%, and the Nasdaq, a tech-heavy index, added 0.78%.

Coming into today, shares of the seller of routers, switches, software and services had gained 12.66% in the past month. In that same time, the Computer and Technology sector lost 5.61%, while the S&P 500 lost 7.42%.

Investors will be hoping for strength from CSCO as it approaches its next earnings release. In that report, analysts expect CSCO to post earnings of $0.73 per share. This would mark a year-over-year decline of 6.41%. Meanwhile, our latest consensus estimate is calling for revenue of $11.99 billion, down 7.44% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.13 per share and revenue of $49.17 billion. These totals would mark changes of +0.97% and -5.26%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for CSCO. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 4.8% lower. CSCO is currently a Zacks Rank #3 (Hold).

In terms of valuation, CSCO is currently trading at a Forward P/E ratio of 13.32. Its industry sports an average Forward P/E of 14.65, so we one might conclude that CSCO is trading at a discount comparatively.

Meanwhile, CSCO's PEG ratio is currently 2.47. 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 industry currently had an average PEG ratio of 2.88 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 73, putting it in the top 29% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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