Back to top

Image: Bigstock

Cisco Systems (CSCO) Gains But Lags Market: What You Should Know

Read MoreHide Full Article

Cisco Systems (CSCO - Free Report) closed at $46.64 in the latest trading session, marking a +1.06% move from the prior day. This move lagged the S&P 500's daily gain of 1.54%. Meanwhile, the Dow gained 0.85%, and the Nasdaq, a tech-heavy index, added 1.87%.

Prior to today's trading, shares of the seller of routers, switches, software and services had lost 0.32% over the past month. This has lagged the Computer and Technology sector's gain of 3.97% and the S&P 500's gain of 0.57% in that time.

Wall Street will be looking for positivity from CSCO as it approaches its next earnings report date. In that report, analysts expect CSCO to post earnings of $0.74 per share. This would mark a year-over-year decline of 10.84%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $12.09 billion, down 9.94% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.15 per share and revenue of $49.24 billion. These totals would mark changes of +1.61% and -5.13%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for CSCO. 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.

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 has moved 0.04% higher. CSCO is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, CSCO is holding a Forward P/E ratio of 14.67. This valuation marks a discount compared to its industry's average Forward P/E of 91.

It is also worth noting that CSCO currently has a PEG ratio of 2.72. 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 industry currently had an average PEG ratio of 3 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 165, which puts it in the bottom 36% 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.

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


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Cisco Systems, Inc. (CSCO) - free report >>

Published in