Why Cisco Systems (CSCO) Outpaced the Stock Market Today

In the latest close session, Cisco Systems (CSCO) was up +1.79% at $80.44. The stock exceeded the S&P 500, which registered a gain of 0.44% for the day. At the same time, the Dow added 0.36%, and the tech-heavy Nasdaq gained 0.54%.

Coming into today, shares of the seller of routers, switches, software and services had gained 0.48% in the past month. In that same time, the Computer and Technology sector lost 2.47%, while the S&P 500 lost 3.31%.

The investment community will be closely monitoring the performance of Cisco Systems in its forthcoming earnings report. On that day, Cisco Systems is projected to report earnings of $1.03 per share, which would represent year-over-year growth of 7.29%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $15.52 billion, up 9.69% from the year-ago period.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $4.14 per share and a revenue of $61.33 billion, representing changes of +8.66% and +8.25%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Cisco Systems. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, there's been a 0.12% rise in the Zacks Consensus EPS estimate. As of now, Cisco Systems holds a Zacks Rank of #2 (Buy).

Looking at its valuation, Cisco Systems is holding a Forward P/E ratio of 19.09. This indicates a premium in contrast to its industry's Forward P/E of 17.31.

Also, we should mention that CSCO has a PEG ratio of 2.45. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. By the end of yesterday's trading, the Computer - Networking industry had an average PEG ratio of 1.62.

The Computer - Networking industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 97, finds itself in the top 40% echelons of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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