Cisco Systems Inc.’s CSCO stock has been a consistent performer in the last 12 months. While the Zacks Computer – Networking industry gained 27.6%, shares of this technology giant recorded marginally better returns of 27.7%. This trend can primarily be attributed to improving revenues from subscription services as well as robust demand in the telecom sector.
Meanwhile, the company is focusing on expanding its Internet of Things (IoT) division, as per a recent announcement at the Mobile World Congress (MWC), held in Barcelona.
Based on its acquisition of Jasper Technologies in Mar 2016 Cisco is aiming at becoming a major IoT platform provider going forward.
Notably, the platform has emerged as one of the biggest monetization assets for Cisco given the burgeoning demand for IoT.
At MWC, Cisco announced that itwill now provide support for narrowband IoT low-power wide-area network (LPWAN), which has applications in the industrial IoT space. Moreover, the company inked a partnership with car-maker Honda and Bright Box, a European connected-car platform which will enable Jasper to breath life into Bright Box’s infotainment centers that come as a standard fitting in many of Honda’s European car models. It was also announced at the event that Cisco will collaborate with Samsung and Jupl (a health data startup) to develop a wearable device targeted at the elderly for health monitoring purposes.
What Does this Mean for Cisco?
As of today, on the verge of one year completion, Cisco’s IoT unit has witnessed a whopping surge of 157% in enterprise customer additions, 135% increase in the number of devices that are being managed and a 42% advance in adoptions for Jasper’s Control Center product.
As per an IDC report, the IoT market is estimated to reach a massive $1.7 trillion by 2020 with nearly 30 billion connected “things.” Given the huge potential the sector has to offer, the time is ripe to carve a niche and that’s exactly what Cisco is doing right now.
Not surprisingly then, there is stiff competition in the space with the presence of major players such as Alphabet’s Google GOOGL, Microsoft MSFT, IBM, Intel, Siemens and AT&T.
However, with these announcements, Cisco looks poised to take on the competition head on which augurs well for the company in the long run.
Cisco Systems, Inc. Price and Consensus
Cisco Systems, Inc. Price and Consensus | Cisco Systems, Inc. Quote
At present, Cisco carries a Zacks Rank #3 (Hold).
A better-ranked stock in the broader technology space is Digi International Inc. DGII carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Notably, the Zacks Consensus Estimate for Digi International’s current year has improved to 43 cents from 42 cents in the last 60 days.
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