Cisco Systems shares moved -7.6% over the last 52 weeks, with a high of $56.19 and a low of $38.6. During this time, the stock outperformed the S&P 500 index by 3.0%. As of January 2022, the company's 50-day average price is $49.0. Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol based networking and other products related to the communications and information technology industry in the Americas, Europe, the Middle East, Africa, the Asia Pacific, Japan, and China. The large-cap Telecommunications company has 83,300 full time employees and is based in San Jose, CA. Cisco Systems has returned a 3.0% dividend yield over the last 12 months.
Low Leverage Levels But Current Assets Are Far Outweighed by Liabilities:
| 2019-07-31 | 2020-07-31 | 2021-07-31 | 2022-07-31 | |
|---|---|---|---|---|
| Revenue (k) | $51,904,000 | $49,301,000 | $49,818,000 | $51,557,000 |
| Gross Margins | 62.9% | 64.3% | 64.0% | 62.6% |
| Operating Margins | 28.0% | 28.6% | 27.5% | 27.1% |
| Net Income (k) | $11,621,000 | $11,214,000 | $10,591,000 | $11,812,000 |
| Net Margins | 22.39% | 22.75% | 21.26% | 22.91% |
| Earnings Per Share | $2.61 | $2.64 | $2.5 | $2.69 |
| Diluted Shares (k) | 4,453,000 | 4,254,000 | 4,236,000 | 4,095,820 |
| Free Cash Flow (k) | $14,922,000 | $14,656,000 | $14,762,000 | $12,749,000 |
| Capital Expenditures (k) | -$909,000 | -$770,000 | -$692,000 | -$477,000 |
| Net Current Assets (k) | -$16,467,000 | -$13,360,000 | -$17,110,000 | -$17,512,000 |
| Current Ratio | 1.51 | 1.72 | 1.49 | 1.43 |
| Long Term Debt (k) | $14,475,000 | $11,578,000 | $9,018,000 | $8,416,000 |
| Net Debt / EBITDA | 0.73 | 0.17 | 0.15 | 0.15 |
Cisco Systems Is Currently Fairly Valued:
Compared to the Telecommunications sector's average of 18.85, Cisco Systems has a trailing twelve month P/E ratio of 19.2 and, according to its EPS guidance of 4.03, an expected P/E ratio of 12.8. Cisco Systems's PEG ratio is 1.42 based on its 13.5% annual average growth rate of historical and projected earnings per share. This implies that the company's shares are fairly valued.
Cisco Systems's P/B ratio is 5.1 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 111.7% above their fair value as expressed by Benjamin Graham's formula:
√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 2.61 * 10.128) = $24.39
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 $51.62, CSCO is trading -10.3% 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 1.0% of the company's shares are tied to short positions. Institutions own 76.7% of Cisco Systems's shares, while the insider ownership rate stands at 0.08%. The biggest shareholder is the Vanguard Group, Inc. with a 9% stake in the company worth approximately $19,644,357,028.
