| Snowflake Score | |
|---|---|
| Valuation | 3/6 |
| Future Growth | 2/6 |
| Past Performance | 3/6 |
| Financial Health | 6/6 |
| Dividends | 5/6 |
CSCO Overview
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.
Cisco Systems Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$55.26 |
| 52 Week High | US$35.28 |
| 52 Week Low | US$60.27 |
| Beta | 0.90 |
| 1 Month Change | -5.08% |
| 3 Month Change | 4.74% |
| 1 Year Change | 40.54% |
| 3 Year Change | 14.01% |
| 5 Year Change | 75.54% |
| Change since IPO | 71,427.50% |
Recent News & Updates
Cisco's Flat Revenues Obscure Steady Underlying Growth, Creating Buy Opportunity
Even though Cisco has continued to grow with the strong increase in internet traffic, its reported revenues have been flat since 2014. This is due to Cisco's transition of its revenue model from that of a network equipment seller into a subscription and services company which generates recurring revenues. This misperception has created an opportunity to invest in the leading network communications company at an attractive valuation.
Cisco (NASDAQ:CSCO) is on Track to Dividend Aristocracy
After a turbulent 2020, Cisco Systems, Inc. (NASDAQ: CSCO) stock has been doing well in 2021, outperforming the broad market and staying in line with the expectations. Yet, investment banks are divided between the bull and the bear camp. In this article, we will examine those standpoints and take a closer look at the dividend that currently yields 2.6%.
Calculating The Intrinsic Value Of Cisco Systems, Inc. (NASDAQ:CSCO)
Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Cisco Systems, Inc...
Cisco: A Balance Sheet Primed For M&A
Cisco is an old-guard tech stock that continues to thrive in the age of advanced new technologies. The company must leverage its clean balance sheet and inorganically grow the company. Dividend growth along with acquisitional growth will make Cisco's stock even more attractive. Rate Cisco a buy, but slowly losing reasons to be bullish unless necessary moves are made.
Shareholder Returns
| CSCO | US Communications | US Market | |
|---|---|---|---|
| 7D | -4.5% | -3.9% | -1.8% |
| 1Y | 40.5% | 41.5% | 31.5% |
Return vs Industry: CSCO underperformed the US Communications industry which returned 44.1% over the past year.
Return vs Market: CSCO exceeded the US Market which returned 33% over the past year.
Price Volatility
| CSCO volatility | |
|---|---|
| CSCO Beta | 0.90 |
| Industry Beta | 0.95 |
| Market Beta | 1 |
Stable Share Price: CSCO is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 2% a week.
Volatility Over Time: CSCO's weekly volatility (2%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1984 | 79,500 | Chuck Robbins | https://www.cisco.com |
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. It provides infrastructure platforms, including networking technologies of switching, routing, wireless, and data center products that are designed to work together to deliver networking capabilities, and transport and/or store data. The company also offers collaboration products comprising unified communications, Cisco TelePresence, and conferencing, as well as the Internet of Things and analytics software.
Valuation
Is Cisco Systems undervalued compared to its fair value and its price relative to the market?
28.8%
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: CSCO ($55.26) is trading below our estimate of fair value ($77.56)
Significantly Below Fair Value: CSCO is trading below fair value by more than 20%.
Price To Earnings Ratio
PE vs Industry: CSCO is good value based on its PE Ratio (22x) compared to the US Communications industry average (22.3x).
PE vs Market: CSCO is poor value based on its PE Ratio (22x) compared to the US market (17.5x).
Price to Earnings Growth Ratio
PEG Ratio: CSCO is poor value based on its PEG Ratio (3.3x)
Price to Book Ratio
PB vs Industry: CSCO is overvalued based on its PB Ratio (5.6x) compared to the US Communications industry average (2.1x).
Future Growth
How is Cisco Systems forecast to perform in the next 1 to 3 years based on estimates from 27 analysts?
6.6%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: CSCO's forecast earnings growth (6.6% per year) is above the savings rate (2%).
Earnings vs Market: CSCO's earnings (6.6% per year) are forecast to grow slower than the US market (14.9% per year).
High Growth Earnings: CSCO's earnings are forecast to grow, but not significantly.
Revenue vs Market: CSCO's revenue (4.3% per year) is forecast to grow slower than the US market (9.8% per year).
High Growth Revenue: CSCO's revenue (4.3% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: CSCO's Return on Equity is forecast to be high in 3 years time (28.7%)
Past Performance
How has Cisco Systems performed over the past 5 years?
8.0%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: CSCO has high quality earnings.
Growing Profit Margin: CSCO's current net profit margins (21.3%) are lower than last year (22.7%).
Past Earnings Growth Analysis
Earnings Trend: CSCO's earnings have grown by 8% per year over the past 5 years.
Accelerating Growth: CSCO's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.
Earnings vs Industry: CSCO had negative earnings growth (-5.1%) over the past year, making it difficult to compare to the Communications industry average (63%).
Return on Equity
High ROE: CSCO's Return on Equity (25.7%) is considered high.
Financial Health
How is Cisco Systems's financial position?
Financial Position Analysis
Short Term Liabilities: CSCO's short term assets ($39.1B) exceed its short term liabilities ($26.3B).
Long Term Liabilities: CSCO's short term assets ($39.1B) exceed its long term liabilities ($30.0B).
Debt to Equity History and Analysis
Debt Level: CSCO's debt to equity ratio (27.9%) is considered satisfactory.
Reducing Debt: CSCO's debt to equity ratio has reduced from 45.3% to 27.9% over the past 5 years.
Debt Coverage: CSCO's debt is well covered by operating cash flow (134.1%).
Interest Coverage: CSCO earns more interest than it pays, so coverage of interest payments is not a concern.
Balance Sheet
Dividend
What is Cisco Systems's current dividend yield, its reliability and sustainability?
2.68%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: CSCO's dividend (2.68%) is higher than the bottom 25% of dividend payers in the US market (1.35%).
High Dividend: CSCO's dividend (2.68%) is low compared to the top 25% of dividend payers in the US market (3.65%).
Stability and Growth of Payments
Stable Dividend: CSCO's dividends per share have been stable in the past 10 years.
Growing Dividend: CSCO's dividend payments have increased over the past 10 years.
Current Payout to Shareholders
Dividend Coverage: With its reasonable payout ratio (58.2%), CSCO's dividend payments are covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: CSCO's dividends in 3 years are forecast to be well covered by earnings (41.5% payout ratio).
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
0.8yrs
Average management tenure
CEO
Chuck Robbins (55 yo)
6.17yrs
Tenure
US$23,163,710
Compensation
Mr. Charles H. Robbins, also known as Chuck, has been Chief Executive Officer of Cisco Systems, Inc., since July 26, 2015 and has been its Chairman of the Board on December 11, 2017. He has been Director o...
CEO Compensation Analysis
Compensation vs Market: Chuck's total compensation ($USD23.16M) is above average for companies of similar size in the US market ($USD11.33M).
Compensation vs Earnings: Chuck's compensation has been consistent with company performance over the past year.
Leadership Team
Experienced Management: CSCO's management team is not considered experienced ( 0.8 years average tenure), which suggests a new team.
Board Members
Experienced Board: CSCO's board of directors are considered experienced (3.6 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: CSCO insiders have only sold shares in the past 3 months.
Recent Insider Transactions
Ownership Breakdown
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
Company Information
Cisco Systems, Inc.'s employee growth, exchange listings and data sources
Key Information
- Name: Cisco Systems, Inc.
- Ticker: CSCO
- Exchange: NasdaqGS
- Founded: 1984
- Industry: Communications Equipment
- Sector: Tech
- Market Cap: US$233.072b
- Shares outstanding: 4.22b
- Website: https://www.cisco.com
Number of Employees
Location
- Cisco Systems, Inc.
- 170 West Tasman Drive
- San Jose
- California
- 95134
- United States
Listings
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2021/09/22 00:08 |
| End of Day Share Price | 2021/09/21 00:00 |
| Earnings | 2021/07/31 |
| Annual Earnings | 2021/07/31 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.