|Bid||56.22 x 800|
|Ask||56.23 x 3000|
|Day's Range||56.01 - 56.78|
|52 Week Range||40.25 - 57.53|
|Beta (3Y Monthly)||1.06|
|PE Ratio (TTM)||20.53|
|Forward Dividend & Yield||1.40 (2.59%)|
|1y Target Est||N/A|
Shares of Cisco Systems Inc. (CSCO) are up nearly 40% since Dec. 24, nearly in tandem with the bull run in the U.S. stock market. Warning! GuruFocus has detected 6 Warning Sign with CSCO. Cisco appears to have much room to run in the coming quarters as it continues to diversify by expanding from hardware and infrastructure products into software and services.
On Wall Street, it's said the trend is your friend. And nowhere has that gospel been more a reality than in Cisco Systems (NASDAQ:CSCO). But all good things must come to an end, and now, if it looks too good to be true, you're either late to the party or staring at a short in Cisco stock. Let me explain.Source: Shutterstock From the rollout of 5G networks to network security, Cisco has its hands in some of today's and tomorrow's growth markets, to be sure. And with the former, Cisco stock is enjoying one of Wall Street's buzz words of the moment. That's the good news.The bad news for CSCO is that where there's growth, there's also growing competition from smaller and more nimble rivals such as Arista Networks (NYSE:ANET) or Palo Alto Networks (NASDAQ:PANW). The truth is, unlike Cisco's go-go days at the turn of the century, the company is far from being the dominant player in these new growth markets. But that's not all.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAs InvestorPlace's Vince Martin recently noted, investors have priced in a very optimistic or aggressive outlook for Cisco shares. Off the price chart, long-term growth of around 10% and today's comparatively rich multiple are warning signs Wall Street's rose-colored glasses will come off.Bottom line, today's hot buzzword or promotional deal Wall Street style, such as Cisco stock's stake in the 5G market, has a history of sometimes turning out badly for investors. Most recently, the music stopped playing for those who stayed the course in cryptocurrencies or stocks bandied about as blockchain disruptors. * 10 Stocks to Sell Before They Give Back 2019 Gains Ironically enough, Cisco is no stranger to this phenomenon of hyped up marketing gone bad. Just look at the dot-com era, or what became known as the dot-bomb debacle in the ugly aftermath. It's a period from which CSCO stock has still not fully recovered. CSCO Stock Weekly ChartTo say the least, it has been a very friendly trend for Cisco stock bulls in 2019. From last year's corrective bottom, shares are up over 40% and have outperformed nearly every single one of its peers in the Dow Industrials. Only Apple (NASDAQ:AAPL) has turned in a stronger return from the nadir of December's broad-based low. Its shares are up 46%. But on the weekly price chart, Cisco's straight-line run to continued relative new highs since January has put shares in a much more technically tenuous position versus AAPL stock.Shares of CSCO are coming off a run of nine straight weeks hugging the upper Bollinger Band, while sporting an extremely overbought stochastics that has come along for the entire ride. Now and with Cisco stock putting together a confirmed hangman topping candlestick, shares are positioned for some backing and filling.It's recommended that investors who can't resist Wall Street's 5G siren song -- who are positive on Cisco's security prospects or maybe the company's switching gear (which admittedly has been selling well) -- still wait. At a minimum, if you're looking to play momentum in CSCO, a shorter technical pause of two to three weeks before entering a long position makes sense given the severity of the price run.And if you're less hot on Cisco stock's future prospects and see the rally built more on hype and hope than solid ground, shorting today's topping pattern is definitely approachable. However, keeping a stop tethered to last week's high, or better yet using a protective options position with earnings scheduled next week, is also 100% advisable.Investment accounts under Christopher Tyler's management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler's observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional options-based strategies, related musings or to ask a question, you can find and follow Chris on Twitter @Options_CAT and StockTwits. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Oversold Stocks to Run From * 7 Red-Hot E-Commerce Stocks to Consider * 4 Stocks Surging on Earnings Surprises Compare Brokers The post Another Dot-Bomb in Cisco Stock? appeared first on InvestorPlace.
Britain will allow Huawei Technologies a restricted role in building parts of its 5G network, seeking a middle way in a bitter dispute between the United States and China over the next generation of communications technology. Huawei, the world's biggest producer of telecoms equipment, is under intense scrutiny after the United States told allies not to use its technology because of fears it could be a vehicle for Chinese spying. Britain's National Security Council, chaired by Prime Minister Theresa May, met to discuss Huawei on Tuesday.
Boeing’s 737 MAX Crisis Hurts Its First-Quarter Earnings(Continued from Prior Part)Boeing stock plunged Before the Ethiopian Airlines crash on March 10, Boeing (BA) stock had been rallying since the beginning of this year due to growing optimism
To receive further updates on this Cisco Systems (NASDAQ:CSCO) trade as well as an alert when it's time to take profits, sign up for a risk-free trial of Strategic Trader today.We are recommending a bullish trade on Cisco Systems (NASDAQ:CSCO) in the form of a put write.This will be the third time we've sold puts on CSCO. Last week, we bought to close our CSCO May 3rd $54.50 Put Write because the stock had rallied, making the options we sold less valuable. Rather than risk having the stock move against us, we thought it was better to lock in our profits. That way, we could wait for CSCO to pull back before opening another position.InvestorPlace - Stock Market News, Stock Advice & Trading TipsNow that CSCO has dropped back down to support at around $56, we have a good opportunity to open a new trade. CSCO's Highest Price in Over a DecadeWe like CSCO from a technical and fundamental perspective. CSCO isn't just trading above its 2018 highs. It's also breaking out of new bullish continuation patterns to reach its highest price in more than a decade.The company has been able to gain ground because while many sectors of the global economy have experienced slower growth this year, networking infrastructure isn't one of them.Companies are spending billions as they continue to build out their cloud and internal networking infrastructure. CSCO also seems to be taking advantage of the legal and political woes of Huawei, one of the company's biggest competitors, to claw back market share.From a more macro perspective, CSCO is not only likely to be in favor with investors as a large-cap growth stock, but also as a reliable dividend payer. Interest rates are expected to remain very low this year, which increases the value of each dividend payment. New Support at $56As we mentioned above, the stock has come down a little over the last few days, and it is currently up from short-term support near $56 per share. If you look at the daily chart below, you can see that there was some resistance around that level before CSCO's recent move higher.Daily Chart of Cisco Systems (CSCO) -- Chart Source: TradingViewThe fact that CSCO has found new support just above its old resistance level gives us a great chance to open a new put write.We think CSCO will continue to head higher in the near term. The pressure on Chinese telecom equipment-makers, like Huawei, will give CSCO an edge for the next 18-24 months. And as one of the few tech stocks with a non-negligible dividend, CSCO should see stronger than average momentum over the next few weeks.To find out which puts we're selling -- and to get access to our full portfolio of income-generating trades -- consider signing up for risk-free trial subscription to Strategic Trader today. InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of Strategic Trader.Follow our Facebook page to receive each Trade of the Day direct to your News Feed -- and join the conversation.Compare Brokers The post Selling Puts on Cisco Systems is a Great Way to Generate Income appeared first on InvestorPlace.
Will Arista Network Continue to Beat Analysts' Estimates in Q1?(Continued from Prior Part)ANET’s returnsArista Networks (ANET) was listed back in June 2014. The stock has generated multifold returns since then driven by impressive sales and
Will Arista Network Continue to Beat Analysts' Estimates in Q1?(Continued from Prior Part)Wall Street’s optimism about Arista Networks Goldman Sachs (GS) upgraded Arista Networks (ANET) stock to a “conviction buy” last month. Deutsche Bank also
Will Arista Network Continue to Beat Analysts' Estimates in Q1?(Continued from Prior Part)Revenue growth for Arista estimated at 23.3%Arista Networks’ (ANET) revenue growth has been impressive in recent years. The company is operating in the
Will Arista Network Continue to Beat Analysts' Estimates in Q1?Revenue growth of 25.9% Hardware communications company Arista Networks (ANET) is set to announce its first-quarter earnings results on May 2, 2019. Analysts expect the company to post
Will Proofpoint Continue to Beat Earnings Estimates in Q1?(Continued from Prior Part)Strong sales and earnings have resulted in impressive returns In the last five years, Proofpoint (PFPT) stock has risen ~320%. In comparison, its sales and earnings
A lot of companies have great starts on Wall Street. But, few have had as successful of a Wall Street debut as Zoom Video Communications (NASDAQ:ZM). ZM stock has been on a straight line up since its debut last week.The hyper-growth video conferencing company originally priced its IPO in the $28-$32 range. Investor demand was so high at those prices that the list price range for the Zoom IPO eventually moved north to $33-$35. The IPO was finally priced above that already-increased range, at $36. Then, Zoom stock soared more than 80% on its public debut to above $60. The stock kept moving higher the next day, and today, it trades at $67, nearly 90% above the already twice-boosted IPO price.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWhy the huge demand? Plain and simple, Zoom is a great company. The company is in the right space, with 100%-plus revenue growth rates, a healthy long-term outlook, and sky high gross margins. Oh, and the company is already profitable, with only $330 million in revenue last year.All in all, Zoom is simply a really good company. The huge success of the Zoom IPO reflects that.But, Zoom was a hypothetical $30 stock a few days ago. Now, it's nearly a $70 stock. After such a huge rally, one has to look at the underlying fundamentals, and see if the valuation today is worth it.When you do that, it becomes obvious that ZM stock is very richly valued -- perhaps too richly valued. Even under aggressive long-term growth assumptions, I think today's valuation is slightly stretched. While the Zoom IPO was a huge success because its a great company, I'm in no rush to buy Zoom stock today. Instead, I think there's a pullback coming around the corner and investors can afford to wait for better entry points. Zoom Is A Great CompanyIn a nutshell, Zoom is a great company oozing with long-term profit growth potential, and that's why the IPO was so successful.First and foremost, the company is in the right space. Video conferencing is a huge growth market in the enterprise world. There are so many tailwinds at play here. The enterprise world is more connected than ever, and as such, communication between offices around the globe is not only possible, but necessary. Video is considered the tool-of-choice when it comes to digital communication.Further, you have this massive shift from on-site work to remote work, which has been enabled by technology trends and empowered by the gig economy. Also, employee work forces are getting younger, and as a result, want to see all these up-and-coming trends play out at the office. * 5 Dividend Stocks Perfect for Retirees Second, Zoom is a leader in that market with rapidly expanding market share. Next to Cisco (NYSE:CSCO) and Microsoft (NASDAQ:MSFT), Zoom is the other large player in the video conferencing market. But, the company has grown revenue at a consistent 100%-plus rate for several quarters. If the company keeps that up, Zoom will be the number one player in this market soon.Third, Zoom has sky-high gross margins. For the past several years, gross margins have hovered around 80%, and management's made gradual improvements. These robust gross margins allow for robust profit potential at scale.Fourth, Zoom is already profitable. Unlike other hyper-growth companies, Zoom isn't spending an arm and a leg to sustain that big growth. Instead, the company's opex rate sits below 80%. With gross margins around 80%, that combination produced profits last year. The Valuation Is StretchedAlthough Zoom is a great company with a ton of long-term potential, it increasingly looks like that all that potential is more than priced into the stock today.Consider this: The Zoom IPO was supposed to price around $30 per share. Today, the stock trades near $70. That's a 100%-plus increase in just a few days and it's stayed there. For most stocks, such a move higher absent a monumental catalyst would be a sure-fire sign of overbought conditions. Investors aren't applying the same logic to the Zoom IPO because it's an IPO. But, my numbers say they should.The video conferencing market measured roughly $11 billion in 2017. With revenue of $150 million, Zoom had just over 1% market share. That market share grew in 2018, likely to somewhere around 3% (assuming the video conferencing market grew at the projected 10% rate). Over time, as Zoom continues to prove out its competitive advantages, the company should continue to expand its foot print. From this perspective, I think 10-15% market share by 2025 is very doable.Current estimates peg the video conferencing market at $20 billion by then. That seems light to me. IDC forecast the unified communications and collaboration market as being worth nearly $45 billion over the next few years, and video should command the lion's share of that market given secular trends towards video adoption. As such, I think video conferencing will measure closer to a $30 billion market by 2025.A 10-15% market share on that implies $3.75 billion in revenue, at the midpoint, by 2025. Assuming 85% gross margins and a fairly regular 40% opex rate, that flows into roughly $1.7 billion in operating profits. Taking out 20% for taxes, you're left with $1.35 billion in net profits. Based on a growth average 20x forward multiple, that implies a reasonable 2024 valuation target of $27 billion. Discounted back by 10% per year, that equates to a 2019 market cap of just under $17 billion. * 10 S&P 500 Stocks to Weather the Earnings Storm That's roughly the market cap of Zoom today, and it's April 2019. As such, upside in the near term seems limited by a stretched valuation. Bottom Line on the Zoom IPOTo recap, the Zoom IPO was a huge success because Zoom is a great company, and at $30 per share, the stock was way undervalued considering the company's long-term growth potential.But, after a huge IPO pop, Zoom stock now seems fully valued. Near-term upside is capped by what is already a stretched valuation. As such, while ZM stock is a long-term holding, investors can afford to wait for better prices to enter for that long haul.As of this writing, Luke Lango did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Tech Stocks With Too Much Risk, Not Enough Upside * 7 Companies That Are Closing the CEO-Worker Wage Gap * 7 Video Game ETFs That Will Make You a Winner Compare Brokers The post Zoom Is A Great Company, But Post-IPO Pop Valuation Looks Full appeared first on InvestorPlace.
Eric Yuan, Silicon Valley's newest billionaire tech founder and 48-year-old founder of San Jose-based Zoom, spent more than half his life in his native China, emigrating at age 27 after winning a visa to the U.S. on his ninth try in two years. Today, Yuan's Chinese connections continue to be a major part of the Zoom story.
The initial public offering (IPO) of Lyft (NASDAQ:LYFT) is reading like a classic venture capital "down round," in which new capital is raised at valuations lower than in the previous round.Source: ZoomShares that launched at over $83 each less than one month ago are trading at around $58 each on Monday. That's a 30% haircut.This doesn't bode well for Uber Technologies, which issued its S-1 April 11 and is now trying to convince people its stock is worth buying. Uber's most recent private capital raise was also a classic "down round," with Softbank buying about 20% of existing equity at a valuation of $48 billion.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut things don't have to be that way. Why Zoom ZoomedZoom Video Communications (NASDAQ:ZM) broke fast out of the gates after listing shares at $36 each on April 18. They were trading at $65 on Monday. * 7 Tech Stocks With Too Much Risk, Not Enough Upside Zoom's S-1 showed it making money for the fiscal year ending in January, 3 cents per share on revenue of $330.5 million. The April 22 valuation of nearly $16 billion looks rich, but Zoom's revenues more than doubled between 2018 and 2019, rising faster than expenses. If Zoom continues to grow, in other words, it should be a profit-making machine.Zoom CEO Eric Yuan also provided an attractive cover story, that of a Chinese-born former Cisco Systems (NASDAQ:CSCO) engineer beating his former employer with a "freemium" model, built entirely in the cloud.Before coming public, Zoom had just five funding rounds, the last bringing in $115 million. While videoconferencing is established as a technology, researchers see its growth continuing, approaching $14 billion in four years. Why Lyft FailedLyft, by contrast, issued an S-1 that was big on promises, but even bigger on losses. Like Zoom, its revenue doubled in the year before going public, but expenses nearly did too. The company reported a 2018 loss of $43.04 per share, on revenues of $2.16 billion after losing $35.53 per share on 2017 revenue of $1.06 billion, and $37.08 per share on revenue of $343 million the year before.Lyft claimed a valuation of $11 billion when it raised $1 billion in cash late in 2017, raised capital twice more in 2018 and carried a market cap of under $16 billion early on April 22.Ride-hailing is great in theory, but in practice it's a taxi, one without a license beyond the driver's license and organized online. That's why Lyft is promoting other forms of mobility, without drivers, like scooters and bikes. That's why Lyft bulls are talking about self-driving cars. The gig economy is not where you want to place your bets when unemployment is below 4%, and Lyft insists its drivers don't really have jobs , The Bottom LineThere are two important lessons here for cloud investors.First, you don't want to buy something that doesn't make money. Zoom makes money. Lyft does not make money.Second, if you're buying technology, it should be self-service. Zoom's technology is self-service, and the price starts at free. Lyft technology is not self-service, even bikes have liability issues and its vision of making transportation "people-centric" is still vaporware.Zoom went public, in other words, because it could offer public investors a good opportunity. Lyft went public because it had run out of private investors to fleece.The short version is this. Buy Google, not Webvan.Dana Blankenhorn is a financial and technology journalist. He is the author of a new mystery thriller, The Reluctant Detective Finds Her Family, available now at the Amazon Kindle store. Write him at firstname.lastname@example.org or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this article. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Tech Stocks With Too Much Risk, Not Enough Upside * 7 Companies That Are Closing the CEO-Worker Wage Gap * 7 Video Game ETFs That Will Make You a Winner Compare Brokers The post Lyft and Zoom Offer Lessons for IPO Investors appeared first on InvestorPlace.
After pricing its IPO at $36 -- above a raised price range of $33 to $35 -- Zoom opened at $65.00 and closed at $62.36. The first-day jump left Zoom valued at about $18.1 billion after accounting for outstanding stock options. Shortly after Zoom began trading, I had a chance to talk with CFO Kelly Steckelberg about Zoom's long-term strategy and post-IPO plans.
Emissions Solutions, AutoNation, Xilinx, Cisco Systems and Qorvo highlighted as Zacks Bull and Bear of the Day
So far 2019 has been spectacular for Cisco Systems (NASDAQ:CSCO). Cisco stock has risen 30% this year. That's the best performance in the Dow Jones Industrial Average, narrowly ahead of Apple (NASDAQ:AAPL). Among the 27 stocks with a market capitalization over $200 billion, only Facebook (NASDAQ:FB) has outpaced CSCO stock YTD.Source: Shutterstock The optimism makes some sense. Cisco's legacy networking business long has struggled with growth, but the company is shifting into areas of better growth. It's becoming more of a security play, giving it exposure to that hot sector. Growing recurring revenue from increasing software sales add to the case, and 5G offers yet another catalyst for Cisco stock.Again, the optimism here makes some sense. Indeed, I laid out the potential bull case for CSCO ahead of its fiscal first quarter report. But with Cisco stock up 25%+ since then, the concern is that even that bull case now is priced in.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 5 Dividend Stocks Perfect for Retirees The Cisco Stock RallyFrom a broad standpoint, there are four key drivers of the big gains in Cisco stock. First, the company's Catalyst 9000 switches have launched well, driving double-digit revenue increases. For a company that has struggled to increase sales (fiscal 2018 revenue was basically equal to FY16 levels) the new product is welcome, to say the least.Second, Cisco is adding more software to its legacy hardware products, including the Catalyst switches. That shift improves margins and adds the recurring revenue tech investors seek these days. It also allows Cisco to continue to monetize its hardware after installation, instead of receiving just a one-time sale.Third, the company continues to move into security. Like more focused players like Palo Alto Networks (NYSE:PANW), here, too, Cisco has built out its software offering instead of focusing on just hardware. Cisco has integrated its SD-WAN products with cloud-based software, which drove double-digit growth in the second quarter.Finally, 5G is on the way, and that represents a real profit driver going forward. The adoption of that technology should help revenue, but Cisco already is investing in its development at the moment, meaning incremental costs should be lower.Obviously, there are other factors at play; this is a company that generates revenue of roughly $50 billion a year. These areas are where Cisco has an edge and an opportunity to accelerate revenue growth. Smaller rival Juniper Networks (NYSE:JNPR) hasn't had the same success, and while CSCO stock has soared, JNPR has been flat for basically four years now. Cisco's moves explain much of the outperformance of its stock. The Concerns with CSCO StockIn sum, the moves make Cisco sound a bit like Microsoft (NASDAQ:MSFT) earlier this decade. Microsoft had similar growth questions, and relied on a legacy market (personal computers) that seemed to have little room for growth.Then new businesses like its Azure cloud platform, a go-to-market change for Office and Windows, and smaller efforts in gaming and hardware have dramatically changed the story. MSFT has more than quadrupled since 2013, thanks to earnings growth and multiple expansion.That said, there are two concerns here. The first is whether the Microsoft model actually is in play here. While there are growth opportunities going forward (perhaps most notably in 5G) the legacy business still is flat, if not shrinking. Security was just 6% of revenue in fiscal 2018, according to figures from the 10-K. Cisco itself is guiding for just 4-6% revenue growth in the third quarter.Growth might be improving, but it's not exactly torrid and certainly not yet. Meanwhile, Cisco stock's big rise has notably changed its valuation. As recently as last year, CSCO was pricing in basically zero growth.Now, Cisco stock trades at over 18x FY19 consensus EPS. Even with the Street projecting 10% growth in FY20, that's not a hugely attractive multiple. It suggests, at the least, that Cisco's recent success will continue for years to come. And it's worth noting that Cisco stock now has outrun the average analyst target.To be sure, that doesn't mean CSCO's run is definitely over or that the stock is a sell. Strong Q3 earnings, likely due next month, can lead those estimates and price targets up. The advent of 5G probably starts contributing next year, and its growth won't end any time soon.Still, the upside looks thinner, and Cisco really can't stumble back at a high-teen P/E multiple. Investors sticking with CSCO at this price had better be sure the transformation will continue.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 5 Dividend Stocks Perfect for Retirees * 7 Reasons the Stock Market Rally Isn't Over Yet * 10 S&P 500 Stocks to Weather the Earnings Storm Compare Brokers The post After an Impressive Run, Cisco Stock Is Starting to Cool Off appeared first on InvestorPlace.
Should investors consider adding Cisco to their portfolio? Jim Cramer weighs in TheStreet's new video segment, #AskCramer
Today we will run through one way of estimating the intrinsic value of Cisco Systems, Inc. (NASDAQ:CSCO) by taking the foreast future cash flows of the company and discounting them back to today's value. This is done using the...
Synamedia's near-term financial performance has been adversely impacted by continued revenue declines as well as by complications in the separation from Cisco. Moody's expects breakeven free cash flow over the next 12 to 18 months, with some possibility of a modest cash burn.
Eric Yuan started Zoom in 2011 after helping build WebEx, which Cisco bought for $3.2 billion. After Thursday's market debut, Yuan's stake in Zoom is worth $2.9 billion. In 2018, he was named Glassdoor's big company CEO of the year, with a 99% approval rating from employees.
Eric Yuan started Zoom in 2011 after helping build WebEx. His company is now worth $15.9 billion after its IPO, and Yuan owns about 20%.
Do you really want to pay 50 times last year's sales for Zoom , a video conferencing company, one that is second-banana in share to Cisco ? Does that make sense? The answer is no. And it is worrisome.
Check Point Software Technologies reported slim earnings and revenue growth that narrowly topped views for the first quarter. Shares of the firewall software maker fell in early trading.