Orders from emerging markets were especially weak, as many of Cisco’s customers were not ready to make big investments in networking infrastructure. When a tech company cuts its guidance, its stock drops rapidly. And that is exactly what happened to CSCO in November following its earnings report.
Full Answer
Why did Cisco stock fall hard Thursday morning?
Shares of Cisco Systems ( CSCO 0.14% ) fell 5.5% on Thursday after the company warned investors that supply chain challenges were weighing on its …
What did Cisco's earnings beat consensus targets?
Nov 18, 2021 · Cisco's stock price declined following its first-quarter earnings release. Image source: Getty Images. Notably, Cisco furthered its transition from …
What do recent analyst estimates for Cisco Systems mean for investors?
Nov 18, 2021 · Cisco Systems Inc (NASDAQ: CSCO) is trading lower Thursday after the company announced worse-than-expected fiscal first-quarter revenue results and issued guidance. Cisco reported quarterly ...
How did CSCO's price move compare to the S&P 500 today?
May 20, 2021 · Cisco Systems Inc (NASDAQ: CSCO) is trading lower Thursday morning after the company issued weak earnings guidance. Menu icon …
Why is Cisco stock dropping?
Is Cisco stock undervalued?
Is CSCO stock a good buy?
Is Cisco stock expected to rise?
Is Cisco a buy hold or sell?
...
Momentum Scorecard. More Info.
| Zacks Rank | Definition | Annualized Return |
|---|---|---|
| 1 | Strong Buy | 24.97% |
| 2 | Buy | 18.45% |
| 3 | Hold | 10.03% |
| 4 | Sell | 5.70% |
What is so special about Cisco?
Is Cisco overvalued?
Is Cisco stock overvalued?
What is Cisco's price target?
The 21 analysts offering 12-month price forecasts for Cisco Systems Inc have a median target of 64.00, with a high estimate of 73.00 and a low estimate of 45.00.
Is Cisco a safe stock?
Is Cisco losing market share?
While Cisco's market share has eroded, it remains the market leader in enterprise network infrastructure with a share of 55.7% in 2021. In its latest earnings briefing, the company highlighted the shift towards the hybrid cloud as a growth catalyst for the company.Mar 3, 2022
Does CSCO pay a dividend?
Investors were happy to see that an analyst upgraded the company's stock
Chris has covered Tech and Telecom companies for The Motley Fool since 2012. Follow him on Twitter for the latest tech stock coverage. Follow @tmfnewsie
What happened
Shares of Cisco Systems ( NASDAQ:CSCO) jumped today after a JPMorgan analyst upgraded the company's stock to overweight from neutral.
So what
JPMorgan analyst Samik Chatterjee also increased his price target for Cisco's stock to $55 from the previous $50. The upgrade is based on a few things that are working in Cisco's favor, including increased IT spending in the sector, Cisco's transition to subscription revenue, and the company's "inexpensive valuation."
Now what
Many investors bought up tech stocks when the pandemic began, but Cisco's stock wasn't invited to the party. With today's share price bump, Cisco's shares are up just 12.2% over the past 12 months.
The networking veteran's fourth-quarter earnings report beat the Street, but management's guidance for the next reporting period left investors cold
Anders Bylund is a Foolish Technology and Entertainment Specialist. Where the two markets intersect, you'll find his wheelhouse. He has been an official Fool since 2006 but a jester all his life.
What happened
Shares of network equipment giant Cisco Systems ( NASDAQ:CSCO) fell hard on Thursday morning. A solid earnings report was undermined by weak guidance for the next fiscal quarter, and Cisco's shares traded 11.3% lower at 10:45 a.m. EDT.
So what
Cisco's fourth-quarter revenue fell 9% year over year to $12.2 billion. Adjusted earnings slid 4% lower, landing at $0.80 per diluted share. The analyst consensus had called for earnings near $0.74 per share on sales of roughly $12.1 billion, so Cisco cleared those bars with some room to spare.
Now what
Cisco achieved a couple of long-term goals in fiscal year 2020. More than half of the company's total sales came from software and services this year, reducing the importance of lower-margin hardware sales. And 78% of Cisco's software revenues were collected in the form of subscription deals, exceeding a management target of 66%.
The networking equipment giant's stock is hanging out in Wall Street's bargain bin right now
Anders Bylund is a Foolish Technology and Entertainment Specialist. Where the two markets intersect, you'll find his wheelhouse. He has been an official Fool since 2006 but a jester all his life.
Why are Cisco's shares so cheap today?
Cisco's shares have fallen 16% since Aug. 12, which was the eve of the company's fourth-quarter earnings report. The stock tumbled more than 11% lower the next day alone and has stayed at these lower levels ever since.
Buy Cisco now and don't worry about it for the next decade or so
In other words, Cisco's management feels confident that the company will bounce back strongly in the post-pandemic era. The company's annual budget for research and development sits at $6.4 billion today, and it's hard to find a Cisco rival whose annual R&D expenses exceed a single billion dollars.
Summary
Cisco is a free cash flow generating machine that is being under-appreciated by investors.
Investment Thesis
Cisco's (NASDAQ: CSCO) ability to prevent cyber-security attacks together with its push towards being a ''zero trust leader'' continues to play out. Over the medium to long term, Cisco has strong tailwinds to its back allowing itself to continue being a free cash flow oozing company.
The Secret To Investing
Want to know how the truly wealthy investors generate strong returns over prolonged periods of time?
Valuation - Large Margin of Safety
Superficially, it appears that Cisco trades at a substantial premium to the rest of its peers. Having said that, as noted above, Cisco's ability to convert its revenues into free cash flows is truly unparalleled with the rest of its peers.
Investors Crave Predictability Above All Else
Furthermore, as a sanity check, notwithstanding Cisco's push towards becoming increasingly subscription-based, compared with its own historical averages, presently investors are not being asked to pay a premium for its stock.
Takeaway
Compared with selloff investors had to endure following Cisco's results from Q4 2019 and Q1 2020, going forward I trust these are likely to start to become less frequent and less pronounced.
Why You Should Join My Marketplace?
Even though Cisco is terrific, evidence shows it's difficult to beat the S&P500 by investing in widely followed richly-priced popular names.
