Why Cisco Systems (CSCO) Stock Is Up Today

NEW YORK (TheStreet) -- Cisco Systems (CSCO) continued to rise Wednesday after Deustche Bank upgraded the networking company to "buy" from "hold" and increased its price target to $30 from $25 in the wake of Cisco Live.

"A mosaic view from our meetings with the networking IT channel, IT buyers, and senior management at Cisco Live gives us conviction on a stronger than anticipated ramp of Cisco's new platforms in Datacenter Switching, Next Gen Routing and Security, Wireless, and Cloud IT Services - heading into the FY-end Jul Q and into FY15+," the firm wrote in a research note.

The stock was up 0.61% to $24.86 at 3:33 p.m.

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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 attractive valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

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

  • Net operating cash flow has slightly increased to $3,198.00 million or 3.36% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -10.63%.
  • Despite currently having a low debt-to-equity ratio of 0.37, 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 3.19 is very high and demonstrates very strong liquidity.
  • CISCO SYSTEMS INC's earnings per share declined by 8.7% 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 increased its bottom line by earning $1.86 versus $1.49 in the prior year. This year, the market expects an improvement in earnings ($2.04 versus $1.86).
  • The gross profit margin for CISCO SYSTEMS INC is rather high; currently it is at 65.34%. Regardless of CSCO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 18.94% trails the industry average.
  • You can view the full analysis from the report here: CSCO Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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