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

Cisco Systems (CSCO) closed at $47.32 in the latest trading session, marking a -0.42% move from the prior day. This change lagged the S&P 500's 0.67% gain on the day. Elsewhere, the Dow gained 0.74%, while the tech-heavy Nasdaq added 0.81%.

Prior to today's trading, shares of the seller of routers, switches, software and services had gained 7.32% over the past month. This has outpaced the Computer and Technology sector's gain of 6.02% and the S&P 500's gain of 3.55% in that time.

Investors will be hoping for strength from CSCO as it approaches its next earnings release, which is expected to be February 12, 2020. In that report, analysts expect CSCO to post earnings of $0.76 per share. This would mark year-over-year growth of 4.11%. Meanwhile, our latest consensus estimate is calling for revenue of $11.98 billion, down 3.74% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.25 per share and revenue of $51.06 billion. These totals would mark changes of +4.84% and -1.63%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for CSCO. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 remained stagnant within the past month. 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 14.61. For comparison, its industry has an average Forward P/E of 15.72, which means CSCO is trading at a discount to the group.

We can also see that CSCO currently has a PEG ratio of 2.49. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer - Networking industry currently had an average PEG ratio of 2.49 as of yesterday's close.

The Computer - Networking industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 28, which puts 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.

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