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

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In the latest trading session, Cisco Systems (CSCO - Free Report) closed at $47.84, marking a +0.57% move from the previous day. This move lagged the S&P 500's daily gain of 1.29%. At the same time, the Dow added 0.78%, and the tech-heavy Nasdaq lost 4.94%.

Coming into today, shares of the seller of routers, switches, software and services had lost 2.08% in the past month. In that same time, the Computer and Technology sector gained 14.37%, while the S&P 500 gained 5.64%.

Investors will be hoping for strength from Cisco Systems as it approaches its next earnings release, which is expected to be February 15, 2023. In that report, analysts expect Cisco Systems to post earnings of $0.86 per share. This would mark year-over-year growth of 2.38%. Our most recent consensus estimate is calling for quarterly revenue of $13.43 billion, up 5.61% from the year-ago period.

CSCO's full-year Zacks Consensus Estimates are calling for earnings of $3.54 per share and revenue of $54.47 billion. These results would represent year-over-year changes of +5.36% and +5.64%, respectively.

Investors should also note any recent changes to analyst estimates for Cisco Systems. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.03% higher. Cisco Systems currently has a Zacks Rank of #3 (Hold).

Investors should also note Cisco Systems's current valuation metrics, including its Forward P/E ratio of 13.43. This represents a discount compared to its industry's average Forward P/E of 21.94.

Investors should also note that CSCO has a PEG ratio of 2.07 right now. 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. Computer - Networking stocks are, on average, holding a PEG ratio of 2.07 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 85, putting it in the top 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

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


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