Cisco Systems (CSCO) Stock Advances on Strong Q1 Expectations

Cisco Systems (CSCO) stock is gaining on Thursday as analysts project the telecommunications equipment company will report after the market closes today a year-over-year growth in earnings.
By U-Jin Lee ,

NEW YORK (TheStreet) -- Cisco Systems (CSCO) - Get Report  stock is gaining 0.11% to $27.85 on Thursday as analysts are project the telecommunications equipment company will report after the market closes today a year-over-year growth in earnings. 

Specifically, profits for the first quarter of fiscal 2016 are anticipated to increase 4% year-over-year and sales are expected to grow 3.3%, according to the Wall Street Journal.

Analysts' estimates for the latest quarter are earnings of 56 cents a share on revenue of $12.65 billion.

In the same period the year before, the company earned 54 cents a share on sales of $12.25 billion.

In July, Robbins succeeded CEO John Chambers. Since then, he's been focusing on Cisco's strengths, mainly its routers and switches, the Journal noted. 

Based in San Jose, Cisco Systems designs, manufactures, and sells Internet Protocol (IP) based networking products and services related to the communications and information technology industry worldwide.

Separately, TheStreet Ratings team rates CISCO SYSTEMS INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

We rate CISCO SYSTEMS INC (CSCO) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, notable return on equity, increase in net income and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 9.6%. Since the same quarter one year prior, revenues slightly increased by 3.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 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.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Communications Equipment industry and the overall market, CISCO SYSTEMS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 3.1% when compared to the same quarter one year prior, going from $2,249.00 million to $2,320.00 million.
  • Net operating cash flow has increased to $4,138.00 million or 14.56% when compared to the same quarter last year. In addition, CISCO SYSTEMS INC has also modestly surpassed the industry average cash flow growth rate of 9.34%.
  • You can view the full analysis from the report here: CSCO
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