NEW YORK (TheStreet) -- Shares of Cisco Systems (CSCO - Get Report) are down 0.67% to $27.30 in mid-morning trading on Wednesday, ahead the company's second quarter fiscal year 2015 earnings release after the market closes today.
For the quarter, Wall Street analysts expect the company to post earnings of 51 cents per share, higher than the 47 cents it reported a year ago.
Cisco is expected to post revenue of $11.8 billion for the period, also higher compared to the $11.16 billion in sales the company reported in the same quarter of last year.
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San Jose, CA-based Cisco designs, manufactures, and sells Internet protocol-based networking and other products related to the communications and information technology industry.
The company also has a line of products for transporting data, voice, and video around the world, operating in the Americas, Europe, Middle East, Africa, Asia Pacific, Japan, and China.
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, attractive valuation levels, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. 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:
- CSCO's revenue growth has slightly outpaced the industry average of 5.2%. Since the same quarter one year prior, revenues slightly increased by 1.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The gross profit margin for CISCO SYSTEMS INC is rather high; currently it is at 65.71%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 14.92% trails the industry average.
- 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 3.03 is very high and demonstrates very strong liquidity.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. 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.
- You can view the full analysis from the report here: CSCO Ratings Report