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

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In the latest trading session, Cisco Systems (CSCO - Free Report) closed at $46.71, marking a +1.63% move from the previous day. This move outpaced the S&P 500's daily gain of 1.56%. Elsewhere, the Dow gained 1.77%, while the tech-heavy Nasdaq added 2.2%.

Coming into today, shares of the seller of routers, switches, software and services had gained 6.07% in the past month. In that same time, the Computer and Technology sector gained 4.45%, while the S&P 500 gained 6.41%.

CSCO will be looking to display strength as it nears its next earnings release, which is expected to be February 13, 2019. In that report, analysts expect CSCO to post earnings of $0.72 per share. This would mark year-over-year growth of 14.29%. Our most recent consensus estimate is calling for quarterly revenue 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.

Investors should also note any recent changes to analyst estimates for CSCO. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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. The Zacks Consensus EPS estimate has moved 0.03% higher within the past month. CSCO is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, CSCO is currently trading at a Forward P/E ratio of 15.24. Its industry sports an average Forward P/E of 15.24, so we one might conclude that CSCO is trading at a no noticeable deviation comparatively.

Also, we should mention that CSCO has a PEG ratio of 2.41. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Computer - Networking was holding an average PEG ratio of 2.18 at yesterday's closing price.

The Computer - Networking industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 50, which puts it in the top 20% 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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