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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 the most recent trading day at $41.50, moving -0.05% from the previous trading session. This move lagged the S&P 500's daily gain of 0.58%. At the same time, the Dow added 0.14%, and the tech-heavy Nasdaq gained 1.66%.

Prior to today's trading, shares of the seller of routers, switches, software and services had gained 11.85% over the past month. This has outpaced the Computer and Technology sector's gain of 4.46% and the S&P 500's gain of 3.15% in that time.

Investors will be hoping for strength from CSCO as it approaches its next earnings release, which is expected to be May 13, 2020. On that day, CSCO is projected to report earnings of $0.73 per share, which would represent 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.

CSCO's full-year Zacks Consensus Estimates are calling for earnings of $3.10 per share and revenue of $49.17 billion. These results would represent year-over-year changes of 0% and -5.26%, respectively.

Investors might also notice recent changes to analyst estimates for CSCO. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. 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, 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. Over the past month, the Zacks Consensus EPS estimate has moved 5.75% lower. CSCO currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, CSCO is holding a Forward P/E ratio of 13.41. This valuation marks a discount compared to its industry's average Forward P/E of 27.77.

We can also see that CSCO currently has a PEG ratio of 2.48. 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. CSCO's industry had an average PEG ratio of 2.82 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 26, which puts it in the top 11% 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.

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


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