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

Zacks Equity Research
American River (AMRB) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Cisco Systems (CSCO) closed the most recent trading day at $43.21, moving +0.68% from the previous trading session. This move lagged the S&P 500's daily gain of 0.7%. At the same time, the Dow added 0.42%, and the tech-heavy Nasdaq gained 1.26%.

Coming into today, shares of the seller of routers, switches, software and services had lost 11.3% in the past month. In that same time, the Computer and Technology sector lost 4.86%, while the S&P 500 lost 6.13%.

Wall Street will be looking for positivity from CSCO as it approaches its next earnings report date. This is expected to be February 13, 2019. In that report, analysts expect CSCO to post earnings of $0.72 per share. This would mark year-over-year growth of 14.29%. Our most recent consensus estimate is calling for quarterly revenue of $12.38 billion, up 4.14% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.02 per share and revenue of $51.45 billion. These totals would mark changes of +16.15% and +4.29%, respectively, from last 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.07% lower. CSCO currently has a Zacks Rank of #3 (Hold).

Investors should also note CSCO's current valuation metrics, including its Forward P/E ratio of 14.23. This represents a no noticeable deviation compared to its industry's average Forward P/E of 14.23.

It is also worth noting that CSCO currently has a PEG ratio of 2.25. 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 industry currently had an average PEG ratio of 2.01 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 175, which puts it in the bottom 31% 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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