Cisco Systems (CSCO) Gains But Lags Market: What You Should Know
In the latest trading session, Cisco Systems (CSCO) closed at $46.26, marking a +0.72% move from the previous day. The stock lagged the S&P 500's daily gain of 1.34%. Meanwhile, the Dow gained 2.13%, and the Nasdaq, a tech-heavy index, added 0.94%.
Prior to today's trading, shares of the seller of routers, switches, software and services had gained 1.28% over the past month. This has lagged the Computer and Technology sector's gain of 7.45% and the S&P 500's gain of 3.92% in that time.
Investors will be hoping for strength from CSCO as it approaches its next earnings release, which is expected to be August 12, 2020. On that day, CSCO is projected to report earnings of $0.74 per share, which would represent a year-over-year decline of 10.84%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $12.09 billion, down 9.94% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.15 per share and revenue of $49.24 billion. These totals would mark changes of +1.61% and -5.13%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for CSCO. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.04% higher within the past month. CSCO is currently sporting a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that CSCO has a Forward P/E ratio of 14.6 right now. This represents a discount compared to its industry's average Forward P/E of 16.9.
It is also worth noting that CSCO currently has a PEG ratio of 2.7. 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 was holding an average PEG ratio of 3 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 105, which puts it in the top 42% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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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