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San Jose, California-based Cisco Systems, Inc. (CSCO) designs, manufactures and sells Internet Protocol-based networking and other products related to the communications and information technology industry. With a market cap of $195.4 billion, the company offers enterprise network security, software development, data collaboration, cloud computing, and other related services.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and Cisco effortlessly fits that bill, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the communication equipment industry. Cisco stands as a titan in the networking industry, bolstered by its formidable market share and brand reputation.
Despite its notable strengths, CSCO slipped 15% from its 52-week high of $57.09, achieved on Sep. 7, 2023. Over the past three months, CSCO stock gained 4.9%, outperforming the Nasdaq Composite’s ($NASX) 2.8% dip during the same time frame.
In the longer term, shares of CSCO dipped 4% on a YTD basis and declined 15.2% over the past 52 weeks, underperforming NASX’s YTD gains of 11.2% and 20.3% returns over the last year.
To confirm the bearish trend, Cisco has traded below its 200-day moving averages since early February, with slight fluctuations recently. Moreover, the stock has been trading below its 20-day moving average lately.
CSCO shares have struggled with overall performance primarily due to weaknesses in its networking segment, which includes switches and routers. This decline is driven mainly by a shift among large enterprises toward cloud-based solutions, reducing demand for traditional networking equipment.
However, on Aug. 16, CSCO shares closed up more than 1% after HSBC Holdings plc (HSBC) upgraded the stock to “Buy” from “Hold” with a price target of $58.
On Aug. 14, CSCO reported its Q4 results, and its shares rose more than 8% in the following trading session. Its revenue of $13.6 billion was better than the consensus of $13.5 billion. Its adjusted EPS declined 23.7% year over year to $0.87. For Q1, the company forecasts revenue between $13.7 billion and $13.9 billion. For fiscal 2025, revenues are expected between $55 billion and $56.2 billion. Its adjusted EPS is anticipated to be between $3.52 and $3.58.
In the competitive arena of communication equipment, Juniper Networks, Inc. (JNPR) has taken the lead over CSCO, showing resilience with a 30.3% uptick on a YTD basis and solid 31.3% gains over the past 52 weeks.
Wall Street analysts are moderately bullish on CSCO’s prospects. The stock has a consensus “Moderate Buy” rating from the 23 analysts in coverage, and the mean price target of $54.42 suggests a potential upside of 12.2% from current price levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
