Cisco Systems (CSCO) Stock Rises as CEO Focuses on New Strategies
NEW YORK (TheStreet) -- Cisco Systems (CSCO) - Get Report shares are advancing 0.25% to $28.40 on Thursday as its new CEO Chuck Robbins is focusing on networking equipment with custom software.
Since regular hardware and software are less appealing to customers because major data center operators like Facebook (FB) and Amazon.com (AMZN) are writing their own code, Robbins is thinking of different ways to make Cisco's product more appealing, Bloomberg reported.
For instance the networking gear would connect appliances, cars and lightbulbs.
"When you connect 500 billion things, it's going to create a massively distributed technology landscape," Robbins said.
Currently, Cisco is working with companies like Siemens (SIEGY) to get into network-connected machinery.
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, largely solid financial position with reasonable debt levels by most measures, notable return on equity, solid stock price performance and increase in net income. 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 9.4%. 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 current debt-to-equity ratio, 0.42, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 2.97, which clearly demonstrates the ability to cover short-term cash needs.
- 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 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 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.
- You can view the full analysis from the report here: CSCO