Cisco Systems Inc

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CSCO : NASDAQ : Technology
$30.1 | %
Today's Range: 30.0 - 30.25
Avg. Daily Volume: 2.24323E7
01/20/17 - 4:00 PM ET

Financial Analysis


CISCO SYSTEMS INC's gross profit margin for the first quarter of its fiscal year 2017 has increased when compared to the same period a year ago. Sales and net income have dropped, however the growth has outpaced the average competitor within the industry. CISCO SYSTEMS INC is extremely liquid. Currently, the Quick Ratio is 3.46 which clearly shows the ability to cover any short-term cash needs. The company's liquidity has increased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 5.71% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q1 FY17 Q1 FY16
Net Sales ($mil)12352.012682.0
EBITDA ($mil)4029.03732.0
EBIT ($mil)3430.03225.0
Net Income ($mil)2322.02430.0


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)70968.059107.0
Total Assets ($mil)126287.0111773.0
Total Debt ($mil)34789.024621.0
Equity ($mil)63406.059977.0


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin69.1965.2
EBITDA Margin32.6129.42
Operating Margin27.7725.43
Sales Turnover0.390.44
Return on Assets8.418.57
Return on Equity16.7615.97
Debt Q1 FY17 Q1 FY16
Current Ratio3.583.35
Debt/Capital0.350.29
Interest Expense198.0159.0
Interest Coverage17.3220.28


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)5024.05082.0
Div / share0.260.21
EPS0.460.48
Book value / share12.6211.8
Institutional Own % n/a n/a
Avg Daily Volume2.208574E72.191481E7

Valuation


BUY. CISCO SYSTEMS INC's P/E ratio indicates a significant discount compared to an average of 30.07 for the Communications Equipment industry and a significant discount compared to the S&P 500 average of 25.49. For additional comparison, its price-to-book ratio of 2.38 indicates a discount versus the S&P 500 average of 2.84 and a discount versus the industry average of 3.31. The current price-to-sales ratio is well above the S&P 500 average and above the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, CISCO SYSTEMS INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
CSCO 14.30 Peers 30.07   CSCO 11.14 Peers 14.55

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

CSCO is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

CSCO is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
CSCO 12.19 Peers 19.93   CSCO 1.16 Peers 0.92

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

CSCO is trading at a significant discount to its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

CSCO trades at a significant premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
CSCO 2.38 Peers 3.31   CSCO 12.90 Peers 27.99

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

CSCO is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, CSCO is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
CSCO 3.09 Peers 2.93   CSCO -1.38 Peers 19.56

Average. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

CSCO is trading at a valuation on par with its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

CSCO significantly trails its peers on the basis of sales growth

 

 

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