NEW YORK (TheStreet) -- Shares of Cisco Systems (CSCO) were gaining 0.04% to $25.16 ahead of the network and communications company's fiscal first quarter earnings report after the close of the market on Wednesday.
Analysts surveyed by FactSet expect the company to report earnings of 53 cents and revenue of $12.17 billion for the the fiscal first quarter. In the fiscal firth quarter last year Cisco reported earnings of 53 cents a share, above the 51 cents a share analysts surveyed by Thomson Reuters expected. The company reported revenue of $12.08 billion in the year-ago quarter, missing analysts' estimates of $12.34 billion.
For the fiscal fourth quarter Cisco reported earnings of 55 cents a share and revenue of $12.36 billion, beating analysts' estimates of earnings of 53 cents a share and revenue of $12.14 billion.
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, increase in stock price during the past year, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and growth in earnings per share. 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:
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. 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.
- 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 7.5%. 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.
- You can view the full analysis from the report here: CSCO Ratings Report