Cisco (CSCO) stock near-term stock sentiment is positive

10:23 am ET, 15 Aug 2018

Cisco Systems (CSCO) shares are trading at 43.40, down -1%.  The company is reporting its fiscal fourth-quarter results after the market close today.  What should investors know about Cisco prior to the earnings?  

Revenue and earnings are expected to grow for the third straight quarter, primarily because of the strong adoption of its subscription-based Catalyst 9000 switches, but also a strong uptick in security and applications.  

Security is one of Cisco's long-term bets, but the business is small now ($1.73 billion in revenue for the first three quarters, accounting for less than 5% of Cisco's total revenue).  The business grew 11% year-over-year last quarter.

Acquisitions are driving some of Cisco's growth as well. The company recently announced to acquired Duo Security for $2.35 billion.  Duo focuses on unified access security and multifactor authentication delivered through the cloud, and Cisco plans to integrate Duo's products with its network, device, and cloud security platforms.

What is the sentiment towards the CSCO stock? Our technical analysis shows that: 

  • The stock short-term sentiment (next 30 days) is trending positive;
  • The mid-term sentiment (3-6 months) is trending negative;
  • The long-term sentiment (9-12 months) is neutral.

Over the last month, Cisco Systems (CSCO) returned +2.2%. 

Cisco Systems, Inc. (CSCO) average analyst price target ($49.20) is 12.48% above its current price ($43.74).

For the latest price and information on Cisco Systems, Inc., please visit Finstead and search for "CSCO price" or "CSCO news".

FireEye: Some Good Reasons To Buy The Stock

4:00 pm ET, 08 Feb 2018

Today after market close, Nvidia (NASDAQ: FEYE) is set to report its earnings for the last fiscal quarter.  According to Finstead Research, FireEye's price target upside is 17.83% (visit Finstead and type "FEYE upside"). 

Here are some good reasons to buy FEYE:

  • Rising cyber threats call for an increased security spend that would amount to ~$170 billion by 2020.
  • The MVX engine used by FireEye includes an exclusive hypervisor for the detection of malware threats, zero-day and advanced persistent threat (APT) attacks on a real-time basis.
  • The subscription-based cloud security services take preventive measures automatically when it comes to malware identification.  FaaS (FireEye-as-a-Service) has incorporated threat intelligence and analytics into the offering and also has a nice dashboard. 
  • Subscription-based products generate stable revenues for FireEye. They comprised 79% of the total and maintained a gross margin above 60% in the past few quarters.
  • The adoption of cost optimization helped FireEye reduce its operating expenses by $174 million. This resulted in an improvement of GAAP operating margin to -2% in the third quarter of 2017, as opposed to -14% in the third quarter of 2016.
  • The acquisition of iSIGHT Partners has enhanced FireEye's product line-up.  FireEye now offers a better intelligence-based security model to the enterprises.
  • FireEye continues to add customers (200 customers in each of the last 9 quarters).

Now, let’s look at the reasons to sell FEYE:

  • Despite its efforts through new product launches, acquisition, and cost optimization, no profit has been reported since FireEye has been listed on NASDAQ Stock Exchange, in September 2013.
  • Competitors' implementation of cybersecurity investment plans by breaking them into phases, makes FireEye’s near-term prospect less lucrative.
  • $14.6 million and $15.9 million negative operating cash flows in 2016 and first 3 quarters of 2017, respectively, continue to worry investors.
  • Strong competition from tech firms such as Cisco and Juniper is noticeable.  Those two firms, in particular, have a much larger sales force than FireEye.

Over the last year, FEYE returned +30.43%. This return is higher than Application Software industry (13.46%), Technology sector (14.82%), and S&P 500 (15.44%) returns.

F5 Networks: Key Challenges To Overcome

7:39 pm ET, 23 Jan 2018

F5 Networks (NASDAQ: FFIV) is set to release earnings results on Wednesday after market close.   According to Finstead Research, FFIV price upside is -11.07% (visit Finbot and type "FFIV upside" or "FFIV price target").  

There are a few things we'd like to bring to your attention prior to the earnings announcement. 

Competitive landscape for F5 remains challenging.  Cisco is the greatest threat to F5, because it dominates the networking industry.  We believe that F5’s technology will remain superior over Cisco's; however, Cisco's presence in the market and its sales execution engine will likely make a dent on F5.   

Other companies such as Citrix, Juniper, Checkpoint, Barracuda also have a strong technology that could pose a threat to F5. 

F5 remains acquisitive in the networking space. The frequent acquisitions are often a distraction to its management, which impacts organic growth.  This may not be a sustainable way to grow a business. 

We're also concerned that F5's business remains fairly concentrated on the American market; approximately 43% of revenue came from outside the U.S.  In contrast, Cisco is much better represented in the international markets.  

Over the last year, FFIV returned +1.23%. This return is lower than Business Software & Services Industry (27.34%), Technology Sector (28.47%), and S&P 500 (25.34%) returns.

Cisco Systems, Inc. (CSCO) Stock Guide

Updated at: 10:31 pm ET, 16 Sep 2020

Before we start: if you're looking for CSCO stock price, you can quickly find it out by visiting Finny and typing "CSCO quote". If you're looking for a quick scoop on CSCO stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "CSCO". You'll get all this info in one place. Or you can just type "CSCO news" to get the latest stock news.

Looking to buy or sell Cisco Systems, Inc. (CSCO)? Interested in getting the full scoop on CSCO, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this CSCO stock guide, we'll address key questions about CSCO, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. CSCO buy or sell? What is CSCO Finny Score?
2. What are the reasons to buy CSCO? Why should I buy CSCO stock?
3. What are the reasons to sell CSCO? Why should I sell CSCO stock?
4. What are CSCO key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Analysis

1. CSCO buy or sell? What is CSCO Finny Score?

#{finnyScore:null}Our quantitative analysis shows 1 reason to buy and 0 reasons to sell CSCO. CSCO doesn’t have an assigned Finny Score, because we don’t have sufficient data points to score the stock.

2. What are the reasons to buy CSCO? Why should I buy CSCO stock?

Here are the reasons to buy CSCO stock:

  • The acceleration of the Internet of Things phenomenon puts Cisco in a position of strength, given its broad product lineup. The continuous investments in the field through its Cisco Investments arm have the potential to deliver outsize returns.
  • Cisco’s focus on web scale customers could increase the company’s footprint in this rapidly growing market.
  • The ongoing gradual increase in share of revenue derived from services will accelerate as Cisco pushes further into software, cloud, and analytics.
  • Cisco is the largest player in the networking space. The company has a strong presence in the router and switch market. It also retained a leadership position in WLAN and Ethernet switching.
  • Cisco’s focus on wireless carriers has increased of late, as evidenced by acquisitions such as Intucell, BroadHop, Cognitive Security, Cariden, ClearAccess and Ubiquisis. With data demand exploding, the wireless carrier segment has grown in importance. Mobile carriers in the U.S. are increasingly looking to make their networks more spectrum-efficient and put their network resources to use without having to materially increase capex expenditure.
  • In order to counter the threat of SDN, Cisco has devised a strategy of its own, which it is referring to as Application Centric Infrastructure (ACI). ACI is a comprehensive approach that ties together physical and virtual compute, network and storage by leveraging centralized policies and orchestration. ACI is made up of new hardware in the Nexus 9000 portfolio and software in the shape of an updated NX-OS operating system along with the Application Policy Infrastructure Controller (APIC), which is the centralized point for managing, monitoring and programming the ACI.
  • The company has pioneered a network system, which has been referred to as the Unified Computing System (UCS). This is a revolutionary blade server system based on x86 architecture that is transforming data centers. The system lowers the cost of ownership by making the entire data center more network-centric, significantly reducing the number of computers/servers required.
  • Cisco has inked strategic alliances with most of major technology companies globally. These partnerships have increased access to new technology, helped in developing innovative products, facilitated joint sales & marketing programs, and expanded total addressable market (TAM). The company has strategic partnerships with Apple, IBM, Microsoft, Viacom, Telenor, Google and Alibaba. We believe partnerships will help Cisco in winning new customers in the long haul.
  • CSCO profitability is improving. The YoY profit margin change was 22.17 percentage points. See CSCO profitability chart.

3. What are the reasons to sell CSCO? Why should I sell CSCO stock?

Let's look at the reasons to sell CSCO stock (i.e., the bear case):

  • The growing adoption of network virtualization tools will increase gross margin pressure from commodity manufacturers in the LAN switching segment. This market is mature and undergoing commoditization.
  • The emergence of Chinese network equipment design and manufacturing firms Huawei and ZTE will affect Cisco revenue and margins in APJC and, to a lesser degree, in the EMEA region.
  • The rapid growth of hybrid and pure cloud-based data centers will decrease market growth in the LAN switching segment. The need for premium switching equipment at the edge will further diminish.
  • Cisco continues to acquire a large number of companies. While this improves revenue opportunities, it increases integration risks. Moreover, we also note that the large acquisitions negatively impact the balance sheet in the form of high level of goodwill, which totaled $30.39 billion or almost 23.1% of total assets as of Jan 27, 2018.
  • Cisco has been forced to offer discounts and deals in response to actions by peers due to stiff competition. The company, together with Juniper, serves almost 80% of the core router market and enjoys the second position in the market. Cisco‘s competitors are revamping their product lines with faster and power-efficient products.

Key Stats

4. What are CSCO key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for CSCO:

Metrics CSCO
Price $40.34
Average Price Target / Upside N/A
Average Analyst Rating N/A
Forward Dividend Yield 0.00%
Industry Communication Equipment
Sector Technology
Number of Employees 74,200
Market Cap $00
Forward P/E Ratio N/A
Price/Book Ratio N/A
Revenue (TTM) N/A
YoY Quarterly Revenue Growth N/A
Profit Margin N/A

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