In the latest trading session, Cisco Systems (CSCO) closed at $47.63, marking a -1.63% move from the previous day. This move lagged the S&P 500's daily loss of 0.71%. Meanwhile, the Dow lost 0.81%, and the Nasdaq, a tech-heavy index, lost 0.79%.
Coming into today, shares of the seller of routers, switches, software and services had gained 11.26% in the past month. In that same time, the Computer and Technology sector gained 7.25%, while the S&P 500 gained 4.77%.
Investors will be hoping for strength from CSCO as it approaches its next earnings release, which is expected to be February 12, 2020. The company is expected to report EPS of $0.76, up 4.11% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $11.98 billion, down 3.74% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $3.25 per share and revenue of $51.06 billion, which would represent changes of +4.84% and -1.63%, respectively, from the prior year.
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.
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, 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 remained stagnant. 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 14.88. This valuation marks a discount compared to its industry's average Forward P/E of 15.81.
Meanwhile, CSCO's PEG ratio is currently 2.54. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer - Networking was holding an average PEG ratio of 2.54 at yesterday's closing price.
The Computer - Networking industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 51, putting it in the top 20% 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.
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