Cisco Systems (CSCO) Gains But Lags Market: What You Should Know
Cisco Systems (CSCO) closed the most recent trading day at $47.77, moving +0.63% from the previous trading session. The stock lagged the S&P 500's daily gain of 1.01%. Meanwhile, the Dow gained 0.66%, and the Nasdaq, a tech-heavy index, added 1.43%.
Prior to today's trading, shares of the seller of routers, switches, software and services had lost 0.25% over the past month. This has lagged the Computer and Technology sector's gain of 2.89% and the S&P 500's gain of 0.19% in that time.
Investors will be hoping for strength from CSCO as it approaches its next earnings release, which is expected to be February 12, 2020. In that report, analysts expect CSCO to post earnings of $0.76 per share. This would mark year-over-year growth of 4.11%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $11.99 billion, down 3.7% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.25 per share and revenue of $51.06 billion. These totals would mark changes of +4.84% and -1.62%, respectively, from last year.
Any recent changes to analyst estimates for CSCO should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, 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. The Zacks Consensus EPS estimate remained stagnant within the past month. CSCO currently has a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that CSCO has a Forward P/E ratio of 14.6 right now. This valuation marks a discount compared to its industry's average Forward P/E of 15.76.
Also, we should mention that CSCO has a PEG ratio of 2.49. 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 2.49 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 41, which puts it in the top 17% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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