|Bid||0.00 x 800|
|Ask||0.00 x 1000|
|Day's Range||242.01 - 245.98|
|52 Week Range||187.08 - 331.27|
|Beta (3Y Monthly)||1.90|
|PE Ratio (TTM)||28.31|
|Earnings Date||Oct 30, 2019 - Nov 4, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||288.38|
The Zacks Analyst Blog Highlights: Intel, Adobe Systems, Mondelez International, Morgan Stanley and Arista Networks
In 2008 Jayshree Ullal was appointed CEO of Arista Networks, Inc. (NYSE:ANET). First, this article will compare CEO...
More than once over the past couple of decades, networking giant Cisco Systems (NASDAQ:CSCO) has been lumped in with other hardware stocks, and rightfully so. For the better part of its existence, Cisco stock has been an investment in networking hardware. Its business has been mostly dependent on enterprise-level IT upgrades.Source: Valeriya Zankovych / Shutterstock.com As the underlying technologies have changed, however, so too have Cisco's opportunities. It's still a hardware name to be sure, but it's also a software name. It's even becoming a recurring revenue platform.This paradigm shift didn't even come close to staving off a huge setback in August. CSCO stock fell from its July peak near $58 to last month's low around $46, with most of the selloff sparked by lackluster guidance for the quarter now underway. Headwinds in China also concerned shareholders.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe dip is ultimately an opportunity to step into a misunderstood and undervalued name. CSCO Stock Undervalued, UnderappreciatedThe post-earnings response was understandable.Cisco stock was already fighting a losing battle, peeling back from its July peak after announcing its intent to acquire Acacia Communications (NASDAQ:ACIA). Despite topping earnings and revenue estimates for the three-month stretch ending in July and pumping up the top line by 6%, earnings guidance of between 80 and 82 cents per share for its first fiscal quarter of 2020 wasn't the 83 cents analysts were modeling. Sales growth could also be flat for the quarter underway, following a 25% tumble in the previous quarter's China-driven revenue. Though the top end of Cisco's guidance was 2%, it was still short of consensus projections of 2.5%. * 7 Best Tech Stocks to Buy Right Now The steep 20% selloff, however, largely ignores the fact that Cisco stock is now trading at 18.7 times its trailing earnings and only 13.6 times its forward-looking income.There are cheaper stocks out there, but there aren't cheaper stocks out there like CSCO. Indeed, even the usual valuation measures don't apply without a footnote. In this case that footnote is $33.4 billion worth of liquid assets or outright cash sitting on Cisco's balance sheet, versus its market cap of $201 billion.The valuation also doesn't reflect the fact that, although it's been occasionally uneven thanks to new competition from the likes of Juniper Networks (NYSE:JNPR) and Arista Networks (NYSE:ANET), Cisco hasn't failed to produce some level of profit in any quarter for over a decade. That includes the 2008 recession prodded by the subprime mortgage meltdown.And that reliability is only poised to improve. Cisco Embraces SubscriptionsThe company has arguably touted the idea more than it's mattered yet. Nevertheless, recurring revenue is a key part of its new business model.For the record, it's actually been a piece of the Cisco strategy as far back as 2017. That's when the tech giant launched its first-ever subscription-based product leveraging its Catalyst 9000 networking platform. But, CEO Chuck Robbins explained in March that recurring revenue should make up 30% of the company's total business within the next three years.To that end, as of the recently ended quarter, software subscriptions made up 70% of total software revenue. Applications and services only accounted for a little more than one-third of Cisco's total business.It's not clear if the company's fiscal trajectory is on pace to reach the goal. The paradigm shift within the technology arena favors Cisco exceeding that goal rather than falling short of it.One only has to look at the evolution of cloud computing to see renting rather than owning is the new norm. Amazon (NASDAQ:AMZN) has built a multi-billion dollar business on the premise of providing access to remote servers to organizations that don't want a giant server bank on-site, or can't afford the cash needed to outright buy a data center.Cybersecurity service provider FireEye (NASDAQ:FEYE) has taken the idea a step further. It provides an entire suite of cloud-based digital security solutions that in the past would have been installed on-premise. Its customers enjoy the fact that for a small recurring fee, their service providers keep that cloud-based software, service and storage up-to-date.Amazon and FireEye like the fact that the underlying contracts make for predictable revenue.The trend dovetails nicely into Cisco's relatively new software-based routing platforms like its SD-WAN, which automatically remain up-to-date and secure without any major maintenance needed on the user's end. In the past, major improvements may have required a much more expensive purchase of new hardware. The Bottom Line for Cisco StockIt's all still a work in progress making it difficult to pinpoint where Cisco will be three years from now. Indeed, it's difficult to say where the company will be one year from now. To the extent its risk and potential can be weighed, however, Cisco stock looks like a buy-worthy bargain here.Headlines spurred an emotional response last month, which resulted in a knee-jerk selloff. Weakness in China didn't help in that regard. A closer inspection of the numbers would have made clear that Asia still only accounts for 15% of total revenue.Either way, with a potential end to the tariff war looming at the same time the company is just getting very, very good at revenue-steadying subscriptions, this beaten-down iconic name just might make for a decent addition to most portfolios.As of this writing, James Brumley held a long position in FireEye. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 3 Artificial Intelligence Stocks to Buy * 7 Industrial Stocks to Buy for a Strong U.S. Economy * 3 Beaten-Down Bank Stocks to Buy and Hold for the Long Term The post Buy Cisco Stock for the Bargain, Stick With it for the Stability appeared first on InvestorPlace.
Cisco (NASDAQ:CSCO) stock was having a fairly good year -- until a couple weeks ago. Cisco's fiscal fourth quarter earnings report had some ominous details. The result was that CSCO stock had its biggest drop in about six years -- 8.6%. Cisco stock also fell ahead of earnings, for a total drop of 12.3% in two sessions.Source: Ken Wolter / Shutterstock.com Since then, the shares have remained depressed, even though the overall markets have staged a nice rally. * 10 Stocks to Buy for September So let's take a look at the quarter. On the positive side of things, CSCO reported its strongest growth on the top line in about six years, with revenues up 6% to $13.4 billion. There was actually strength across all the main businesses like switches, routers and other networking equipment. The security unit also remained strong, with sales up about 14% to $714 million.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn the meantime, CSCO continues to invest heavily in its M&A. The biggest deal was for Acacia Communications (NASDAQ:ACIA), for $2.6 billion. The company is a fabless semiconductor operator that is focused on high-speed interconnect offerings. The deal certainly looks like a synergistic fit and should help with growth.There have also been a variety of smaller deals. For example, Cisco has acquired Voicea, which has a real-time transcription service for meetings. Then there was the acquisition of CloudCherry, a provider of technology for customer experience management. At the core of this is advanced predictive analytics and machine learning. So What Was the Bad News?Okay, so why did Wall Street sell off Cisco stock? Well, the guidance was not encouraging. The current quarter is likely to see revenue growth of 0% to 2%, while the Street was looking for 3% (the company does not provide full-year guidance). CSCO also expects earnings to be below forecasts.As the global economy has come under pressure, Oracle's sales to service providers have decelerated. Let's face it, such purchases can easily be delayed whenever there is economic uncertainty. Keep in mind that other suppliers of large technology equipment -- like NetApp (NASDAQ:NTAP) -- have also reported disappointing results.For CSCO, there could be further problems as competitors like Arista Networks (NYSE:ANET) and Hewlett Packard Enterprise (NYSE:HPE) get more aggressive on pricing to pick up new customers In other words, Cisco's margins could be vulnerable.Next, the situation in China remains a nagging issue. On the earnings call, Cisco CEO Chuck Robbins noted that sales to providers in the country have taken a big hit (down a grueling 25%). Note that it appears that the company is not even being invited to bid on new projects!It's not clear how long this will last. But given that there has been little substantive progress on trade talks, the problems in China could persist for some time. Bottom Line on Cisco StockWith the drop-off in Cisco stock, the valuation is now at reasonable levels. Consider that the forward price-to-earnings ratio is at roughly 13x. The dividend is also an attractive 3%. This is actually among one of the highest in the tech industry.CSCO also should continue to generate strong cash flows. For fiscal 2019, they came to a hefty $15.8 billion, up 16% on a year-over-year basis. There is about $33.4 billion in the bank.So for now, there may be a floor on CSCO stock, as the bad news seems to be factored in. On the other hand though, this does not mean there will be much upside either from current levels. There are few headwinds on the horizon. Rather, with the global economy in flux, there could easily be some more negative surprises. * 7 Best Tech Stocks to Buy Right Now So for the time being, there should be no rush to get into CSCO stock.Tom Taulli is the author of the book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Best Tech Stocks to Buy Right Now * 10 Mid-Cap Stocks to Buy * 8 Precious Metals Stocks to Mine For The post Cisco Stock May Go Nowhere for a While appeared first on InvestorPlace.
Arista Networks (ANET) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.
The cloud is moving much closer to you, and the trend could deliver major profits for the companies that power and capitalize on that shift.
Arista Networks, Inc. (NYSE:ANET) saw significant share price movement during recent months on the NYSE, rising to...
GW Pharmaceuticals, NetApp, KB Home, PulteGroup, M/I Homes, Lennar and Toll Brothers highlighted as Zacks Bull and Bear of the Day
Shares of Silicon Valley's biggest companies fell sharply on Wednesday as the Dow Jones Industrial Average closed out its worst day yet of 2019.
NetApp Inc. this year paid its median employee just shy of $200,000 — a level that puts it on par with some of Silicon Valley's biggest companies and represents a 26 percent jump, year-over-year.
Driven by strength in wireless business, Verizon (VZ) beats on second-quarter 2019 estimates, while Qualcomm (QCOM) surpasses third-quarter fiscal 2019 earnings estimates despite trade woes.
Growth is slowing for this networking hardware maker, but the cloud is alive and well and campus data centers are coming into their own as an expansion opportunity.
Tech stocks led the sell-off. Investors have been concerned about a slowdown in tech spending after NetApp's preliminary guidance on August 2.
Last week, Donald Trump threatened 10% tariffs on $300 billion in Chinese imports. The stock market was sent tumbling on August 2, led by a tech sell-off.
Key market indexes saw big weekly losses as President Trump continued to make waves with his tweets. The Dow Jones industrials dived as much as 334 points Friday.