Limited Upside from Cisco (CSCO) After Recent Rally

Posted February 17, 2017

Cisco's (CSCO) mixed fiscal second-quarter results initially scared investors, but a closer look shows that the networking giant is making strides in its efforts to expand into faster-growing technologies. Ironwood Investment Management LLC boosted its stake in Cisco Systems by 0.3% in the third quarter. The consensus estimates are calling for $0.58 in EPS and $11.86 billion in revenue. Physicians Financial Services Inc. now owns 36,978 shares of the network equipment provider's stock worth $1,060,000 after buying an additional 323 shares during the period. Overall, the consensus ratings were for Hold by the pool of analysts.

The buoyancy in the outlook of Cisco Systems, Inc.

Cisco Systems (NASDAQ:CSCO) opened at 32.82 on Thursday. The stock has a market cap of $170.30 billion, a P/E ratio of 16.232 and a beta of 1.36. Current price places the company's stock 8.95% away from its 200-day simple moving average, 6.45%, away from the 50-day average and also 4.74% away from 20-day average.

Cisco Systems and SunPower released their latest earnings reports after closing bell tonight.

Total deferred revenue jumped 12.5% year over year to $17.1 billion, reflecting Cisco's ongoing shift toward subscription software.

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Cisco Systems Inc. continued its fitful progress in transforming itself into a software company as it met expectations on second-fiscal quarter revenues and just topped profit estimates.

Over the couple years CSCO has established a strong pattern of missing Street earnings views 0% of the time, according to historical earnings data, met predictions on 3 occasions and surpassed estimates 9 times over the last couple years. This move has generated increased interest from both analysts and investors.Since the start of the calendar year, Cisco Systems, Inc.

IBD'S TAKE: Cisco's dividend yield is higher than those of Intel, Microsoft and Apple. The ex-dividend date is Wednesday, January 4th. Cisco Systems's payout ratio is presently 49.52%. For comparison, there was a revenue of $12B and EPS of $0.57 in the April 2016 period. Shares were up 2.68% at $33.70. On a consensus basis, analysts have given a recommendation of 2.20 on company shares. During the trading on 02/13/2017, Company's stock ranged from $31.55 to $32.00. JMP Securities reiterated a "market perform" rating on shares of Cisco Systems in a research note on Wednesday, October 5th. (NASDAQ:CSCO) traded with the volume of 40.46 Million in the previous trading session. (CSCO) offloaded shares in a transaction closed on Friday December 23, 2016. Average monthly active users were 319 million for the quarter, up 4% year-over-year and compared to 317 million in the previous quarter. The sale was disclosed in a filing with the SEC, which is available through this link.

Cisco Systems, Inc designs and sells a range of products, provides services and delivers integrated solutions to develop and connect networks around the world. The Company operates through three geographic segments: Americas; Europe, the Middle East and Africa (EMEA), and Asia Pacific, Japan and China (APJC).

On the other hand, CSCO's customers are losing in the cloud to vendors like Alphabet Inc, Microsoft Corporation and, Inc., which prefer to build their own hardware from parts, rather than buying high-end gear from outside vendors.