Now trading at a price of $49.46, Cisco Systems has moved -2.39% so far today. In contrast, the S&P 500 index moved -1.7%. R
Cisco Systems shares moved -6.99% over the last 52 weeks, with a high of $55.09 and a low of $38.3. During this time, the stock outperformed the S&P 500 index by 3.18%. As of January 2022, the company's 50-day average price is $49.0. Cisco Systems, Inc. is an American multinational technology conglomerate headquartered in San Jose, California, in the center of Silicon Valley. The large-cap Telecommunications company is based in San Jose, CA. Cisco Systems has returned a 3.06% dividend yield over the last 12 months.
Exceptional EPS Growth with Low Leverage Levels:
| 2019-07-27 | 2020-07-25 | 2021-07-31 | 2022-07-30 | |
|---|---|---|---|---|
| Revenue (MM) | $51,037 | $48,991 | $49,690 | $51,376 |
| Revenue Growth | n/a | -4.01% | 1.43% | 3.39% |
| Gross Margins | 64.0% | 64.67% | 64.19% | 62.77% |
| Gross Margins Growth | n/a | 1.05% | -0.74% | -2.21% |
| Operating Margins | 27.86% | 27.8% | 25.83% | 27.19% |
| Operating Margins Growth | n/a | -0.22% | -7.09% | 5.27% |
| Net Margins | 22.77% | 22.89% | 21.31% | 22.99% |
| Net Margins Growth | n/a | 0.53% | -6.9% | 7.88% |
| Earnings Per Share | $2.73 | $2.65 | $2.51 | $2.87 |
| EPS Growth | n/a | -2.93% | -5.28% | 14.34% |
| Diluted Shares (MM) | 4,250 | 4,237 | 4,217 | 4,110 |
| Free Cash Flow (MM) | $14,922 | $14,656 | $14,762 | $12,749 |
| FCF Growth | n/a | -1.78% | 0.72% | -13.64% |
| Capital Expenditures (MM) | $909 | $770 | $692 | $477 |
| Net Debt / EBITDA | 0.83 | 0.39 | 0.35 | 0.16 |
Cisco Systems Is Reasonably Priced:
Compared to the Telecommunications sector's average of 18.85, Cisco Systems has a trailing twelve month P/E ratio of 18.12 and, according to its EPS guidance of 4.03, an expected P/E ratio of 12.27. Cisco Systems's PEG ratio is 0.01 based on its 2719.2% annual average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 13.05%, because the growth rate implied by Cisco Systems's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 1.39, which implies that the company's shares might in fact be fairly valued.
Cisco Systems's P/B ratio is 5.03 compared to its sector average of 3.12. The company is likely overvalued in terms of its equity. The company's shares are currently trading 122.89% above their fair value as expressed by Benjamin Graham's formula:
√(22.5 * 5-year average EPS * book value per share) = √(22.5 * 2.16 * 10.13) = $22.19
Cisco Systems's strong cash flow trend and reasonable levels of debt attenuate the company's lofty valuation in terms of earnings and assets.
Cisco Systems Is the Subject of Mixed Market Indicators:
20 analysts are following Cisco Systems and have set target prices ranging from $51.0 to $69.0 per share. On average, they have given the company a rating of buy. At the current price of $49.46, CSCO is trading -14.06% away from its average analyst target price of $57.55 per share, implying an analyst consensus of some upside potential for the stock.
The company has a very low short interest since 0.98% of the company's shares are tied to short positions. Institutions own 76.59% of Cisco Systems's shares, while the insider ownership rate stands at 0.08%.
