Back to top

Image: Bigstock

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

Read MoreHide Full Article

In the latest trading session, Cisco Systems (CSCO - Free Report) closed at $45.61, marking a +0.33% move from the previous day. This move outpaced the S&P 500's daily gain of 0.14%. Elsewhere, the Dow lost 0.09%, while the tech-heavy Nasdaq added 0.68%.

Prior to today's trading, shares of the seller of routers, switches, software and services had gained 7.04% over the past month. This has lagged the Computer and Technology sector's gain of 8.09% and the S&P 500's gain of 9.43% in that time.

CSCO will be looking to display strength as it nears its next earnings release, which is expected to be February 13, 2019. On that day, CSCO is projected to report earnings of $0.72 per share, which would represent year-over-year growth of 14.29%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $12.40 billion, up 4.32% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.02 per share and revenue of $51.49 billion. These totals would mark changes of +16.15% and +4.37%, respectively, from last year.

Any recent changes to analyst estimates for CSCO should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. 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. 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. Within the past 30 days, our consensus EPS projection has moved 0.03% higher. CSCO currently has a Zacks Rank of #3 (Hold).

Investors should also note CSCO's current valuation metrics, including its Forward P/E ratio of 15.07. Its industry sports an average Forward P/E of 15.07, so we one might conclude that CSCO is trading at a no noticeable deviation comparatively.

Investors should also note that CSCO has a PEG ratio of 2.38 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. The Computer - Networking industry currently had an average PEG ratio of 2.17 as of yesterday's close.

The Computer - Networking industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 27, putting it in the top 11% 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.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Cisco Systems, Inc. (CSCO) - free report >>

Published in