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Cisco Systems (CSCO) Outpaces Stock Market Gains: What You Should Know

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Cisco Systems (CSCO) closed the most recent trading day at $52.49, moving +1.72% from the previous trading session. This move outpaced the S&P 500's daily gain of 1.22%.

Prior to today's trading, shares of the seller of routers, switches, software and services had gained 0.45% over the past month. This has outpaced the Computer and Technology sector's loss of 3.53% and the S&P 500's loss of 1.49% in that time.

CSCO will be looking to display strength as it nears its next earnings release, which is expected to be May 19, 2021. On that day, CSCO is projected to report earnings of $0.82 per share, which would represent year-over-year growth of 3.8%. Meanwhile, our latest consensus estimate is calling for revenue of $12.58 billion, up 4.96% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.22 per share and revenue of $49.16 billion. These totals would mark changes of +0.31% and -0.29%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for CSCO. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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 0.02% lower. CSCO is currently a Zacks Rank #3 (Hold).

Digging into valuation, CSCO currently has a Forward P/E ratio of 16.03. This valuation marks a discount compared to its industry's average Forward P/E of 16.81.

Also, we should mention that CSCO has a PEG ratio of 2.57. 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. Computer - Networking stocks are, on average, holding a PEG ratio of 2.97 based on yesterday's closing prices.

The Computer - Networking industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 249, putting it in the bottom 2% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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