Cisco Systems (CSCO) closed the most recent trading day at $41.46, moving +0.27% from the previous trading session. The stock lagged the S&P 500's daily gain of 0.9%. At the same time, the Dow added 0.56%, and the tech-heavy Nasdaq gained 1.13%.
Heading into today, shares of the seller of routers, switches, software and services had lost 0.19% over the past month, lagging the Computer and Technology sector's gain of 17.65% and the S&P 500's gain of 14.3% in that time.
CSCO will be looking to display strength as it nears its next earnings release, which is expected to be May 13, 2020. In that report, analysts expect CSCO to post earnings of $0.72 per share. This would mark a year-over-year decline of 7.69%. Our most recent consensus estimate is calling for quarterly revenue of $11.88 billion, down 8.35% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $3.06 per share and revenue of $48.80 billion, which would represent changes of -1.29% and -5.99%, respectively, from the prior 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 a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Within the past 30 days, our consensus EPS projection has moved 2.92% lower. CSCO is holding a Zacks Rank of #3 (Hold) right now.
Investors should also note CSCO's current valuation metrics, including its Forward P/E ratio of 13.5. Its industry sports an average Forward P/E of 16.39, so we one might conclude that CSCO is trading at a discount comparatively.
We can also see that CSCO currently has a PEG ratio of 2.5. 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 2.92 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 66, which puts it in the top 26% 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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