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Cisco Systems (CSCO) Gains But Lags Market: What You Should Know

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In the latest trading session, Cisco Systems (CSCO) closed at $44.64, marking a +1.85% move from the previous day. This move lagged the S&P 500's daily gain of 2.62%. Meanwhile, the Dow gained 1.37%, and the Nasdaq, a tech-heavy index, added 0.05%.

Coming into today, shares of the seller of routers, switches, software and services had gained 1.79% in the past month. In that same time, the Computer and Technology sector lost 3.46%, while the S&P 500 gained 0.24%.

Wall Street will be looking for positivity from Cisco Systems as it approaches its next earnings report date. This is expected to be August 17, 2022. On that day, Cisco Systems is projected to report earnings of $0.82 per share, which would represent a year-over-year decline of 2.38%. Meanwhile, our latest consensus estimate is calling for revenue of $12.75 billion, down 2.85% from the prior-year quarter.

CSCO's full-year Zacks Consensus Estimates are calling for earnings of $3.35 per share and revenue of $51.21 billion. These results would represent year-over-year changes of +4.04% and +2.79%, respectively.

Any recent changes to analyst estimates for Cisco Systems should also be noted by investors. Recent revisions tend to reflect the latest near-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. 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 has moved 0.03% higher. Cisco Systems is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, Cisco Systems is currently trading at a Forward P/E ratio of 13.07. For comparison, its industry has an average Forward P/E of 15.08, which means Cisco Systems is trading at a discount to the group.

Investors should also note that CSCO has a PEG ratio of 2.01 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. Computer - Networking stocks are, on average, holding a PEG ratio of 2.01 based on yesterday's closing prices.

The Computer - Networking industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 90, which puts it in the top 36% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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