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Cisco Systems (CSCO) Dips More Than Broader Markets: What You Should Know

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Cisco Systems (CSCO) closed at $53.13 in the latest trading session, marking a -0.64% move from the prior day. This change lagged the S&P 500's daily loss of 0.04%.

Heading into today, shares of the seller of routers, switches, software and services had gained 1.91% over the past month, lagging the Computer and Technology sector's gain of 6.01% and outpacing the S&P 500's gain of 1.35% in that time.

CSCO will be looking to display strength as it nears its next earnings release. On that day, CSCO is projected to report earnings of $0.82 per share, which would represent year-over-year growth of 2.5%. Meanwhile, our latest consensus estimate is calling for revenue of $13.04 billion, up 7.25% from the prior-year quarter.

CSCO's full-year Zacks Consensus Estimates are calling for earnings of $3.20 per share and revenue of $49.67 billion. These results would represent year-over-year changes of -0.31% and +0.75%, respectively.

Any recent changes to analyst estimates for CSCO should also be noted by investors. 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. 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. The Zacks Consensus EPS estimate has moved 1.1% lower within the past month. CSCO is currently a Zacks Rank #4 (Sell).

Looking at its valuation, CSCO is holding a Forward P/E ratio of 16.69. This valuation marks a discount compared to its industry's average Forward P/E of 18.92.

Investors should also note that CSCO has a PEG ratio of 2.67 right now. 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 was holding an average PEG ratio of 3.54 at yesterday's closing price.

The Computer - Networking industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 249, which puts it in the bottom 2% 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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