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Cisco Systems (CSCO) Advances But Underperforms Market: Key Facts

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In the latest trading session, Cisco Systems (CSCO - Free Report) closed at $56.16, marking a +0.59% move from the previous day. The stock lagged the S&P 500's daily gain of 1.23%. Meanwhile, the Dow gained 1.02%, and the Nasdaq, a tech-heavy index, added 1.43%.

Heading into today, shares of the seller of routers, switches, software and services had gained 6.32% over the past month, outpacing the Computer and Technology sector's loss of 0.04% and the S&P 500's loss of 0.54% in that time.

Market participants will be closely following the financial results of Cisco Systems in its upcoming release. The company plans to announce its earnings on November 13, 2024. In that report, analysts expect Cisco Systems to post earnings of $0.87 per share. This would mark a year-over-year decline of 21.62%. Meanwhile, the latest consensus estimate predicts the revenue to be $13.76 billion, indicating a 6.17% decrease compared to the same quarter of the previous year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $3.56 per share and revenue of $55.61 billion, which would represent changes of -4.56% and +3.36%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Cisco Systems. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.23% lower. As of now, Cisco Systems holds a Zacks Rank of #3 (Hold).

Looking at its valuation, Cisco Systems is holding a Forward P/E ratio of 15.7. This expresses a premium compared to the average Forward P/E of 14.21 of its industry.

It's also important to note that CSCO currently trades at a PEG ratio of 3.76. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Computer - Networking industry had an average PEG ratio of 1.23 as trading concluded yesterday.

The Computer - Networking industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 32, finds itself in the top 13% echelons of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained 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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