Shares of Cisco Systems are down 0.64% to $25 in early afternoon trading on Monday.
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"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, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, growth in earnings per share 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:
- 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 3.10 is very high and demonstrates very strong liquidity.
- The gross profit margin for CISCO SYSTEMS INC is rather high; currently it is at 64.40%. 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 18.20% trails the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 4.2%. Since the same quarter one year prior, revenues slightly dropped by 0.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- CISCO SYSTEMS INC's earnings per share improvement from the most recent quarter was slightly positive. 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 $1.49 versus $1.86 in the prior year. This year, the market expects an improvement in earnings ($2.15 versus $1.49).
- You can view the full analysis from the report here: CSCO Ratings Report
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