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Cisco Systems (CSCO) Gains As Market Dips: What You Should Know

Zacks Equity Research
Interpublic (IPG) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Cisco Systems (CSCO) closed the most recent trading day at $56.57, moving +0.49% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.06%. Elsewhere, the Dow lost 0.1%, while the tech-heavy Nasdaq lost 0.1%.

Prior to today's trading, shares of the seller of routers, switches, software and services had gained 6.73% over the past month. This has outpaced the Computer and Technology sector's gain of 5.14% and the S&P 500's gain of 4.3% in that time.

Wall Street will be looking for positivity from CSCO as it approaches its next earnings report date. This is expected to be May 15, 2019. On that day, CSCO is projected to report earnings of $0.77 per share, which would represent year-over-year growth of 16.67%. Our most recent consensus estimate is calling for quarterly revenue of $12.89 billion, up 3.4% from the year-ago period.

CSCO's full-year Zacks Consensus Estimates are calling for earnings of $3.06 per share and revenue of $51.67 billion. These results would represent year-over-year changes of +17.69% and +4.75%, respectively.

It is also important to note the 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.

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. Within the past 30 days, our consensus EPS projection remained stagnant. CSCO currently has a Zacks Rank of #2 (Buy).

Looking at its valuation, CSCO is holding a Forward P/E ratio of 18.4. This valuation marks a premium compared to its industry's average Forward P/E of 17.61.

Also, we should mention that CSCO has a PEG ratio of 2.63. 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. CSCO's industry had an average PEG ratio of 1.99 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 96, putting it in the top 38% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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