Cisco Systems (CSCO) Dips More Than Broader Markets: What You Should Know
Cisco Systems (CSCO) closed the most recent trading day at $51.77, moving -1.43% from the previous trading session. This change lagged the S&P 500's daily loss of 0.32%. At the same time, the Dow lost 0.32%, and the tech-heavy Nasdaq lost 0.11%.
Heading into today, shares of the seller of routers, switches, software and services had gained 14.37% over the past month, outpacing the Computer and Technology sector's loss of 0.92% and the S&P 500's gain of 4.4% in that time.
Investors will be hoping for strength from CSCO as it approaches its next earnings release. The company is expected to report EPS of $0.82, up 3.8% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $12.58 billion, up 4.96% from the year-ago period.
CSCO's full-year Zacks Consensus Estimates are calling for earnings of $3.22 per share and revenue of $49.17 billion. These results would represent year-over-year changes of +0.31% and -0.26%, respectively.
It is also important to note the recent changes to analyst estimates for CSCO. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.05% higher. CSCO is holding a Zacks Rank of #3 (Hold) right now.
In terms of valuation, CSCO is currently trading at a Forward P/E ratio of 16.31. This valuation marks a discount compared to its industry's average Forward P/E of 16.86.
We can also see that CSCO currently has a PEG ratio of 2.61. 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. CSCO's industry had an average PEG ratio of 3.37 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 225, which puts it in the bottom 12% 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.
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