Cisco Systems Inc Stock Buy Recommendation Reiterated (CSCO)

NEW YORK (TheStreet) -- Cisco Systems (Nasdaq:CSCO) has been reiterated by TheStreet Ratings as a buy with a ratings score of B. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

• ACTIVE STOCK TRADERS: Check out TheStreet's special offer for Real Money, headlined by Jim Cramer, now!

Highlights from the ratings report include:

• The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
• CSCO's revenue growth trails the industry average of 21.8%. Since the same quarter one year prior, revenues slightly increased by 6.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
• Despite currently having a low debt-to-equity ratio of 0.32, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.28 is very high and demonstrates very strong liquidity.
• CISCO SYSTEMS INC has improved earnings per share by 21.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CISCO SYSTEMS INC reported lower earnings of $1.16 versus $1.32 in the prior year. This year, the market expects an improvement in earnings ($1.84 versus $1.16).

Cisco Systems, Inc. designs, manufactures, and sells Internet protocol (IP)-based networking and other products related to the communications and information technology industry worldwide. The company has a P/E ratio of 12.4, equal to the average computer hardware industry P/E ratioand below the S&P 500 P/E ratio of 17.7. Cisco Systems has a market cap of $90.64 billion and is part of the technology sector and computer hardware industry. Shares are down 6.4% year to date as of the close of trading on Friday.

You can view the full Cisco Systems Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

 

For more information on Cisco Systems Inc click any of the following:

• Cisco Systems Inc Stock Price

• Cisco Systems Inc Analyst Ratings

• Cisco Systems Inc Key Stats & Profile

• Cisco Systems Inc Earnings

• Cisco Systems Inc Ratio Comparison

• Cisco Systems Inc Growth Rates

• Cisco Systems Inc Balance Sheet

• Cisco Systems Inc Cash Flow

• Cisco Systems Inc Income Statement