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Cisco Systems (CSCO) Flat As Market Sinks: What You Should Know

Zacks Equity Research
·3 mins read

Cisco Systems (CSCO) closed the most recent trading day at $38.57, making no change from the previous trading session. This change was narrower than the S&P 500's 1.4% loss on the day. Elsewhere, the Dow lost 1.34%, while the tech-heavy Nasdaq lost 1.57%.

Prior to today's trading, shares of the seller of routers, switches, software and services had lost 5.51% over the past month. This has lagged the Computer and Technology sector's loss of 0.17% and the S&P 500's loss of 0.46% 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 $0.71, down 15.48% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $11.88 billion, down 9.74% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.11 per share and revenue of $48.25 billion. These totals would mark changes of -3.12% and -2.14%, respectively, from last year.

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 such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. CSCO is currently a Zacks Rank #3 (Hold).

Looking at its valuation, CSCO is holding a Forward P/E ratio of 12.4. This valuation marks a discount compared to its industry's average Forward P/E of 15.53.

Also, we should mention that CSCO has a PEG ratio of 1.86. 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 2.38 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 180, which puts it in the bottom 29% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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