Shares of the American multinational technology conglomerate Cisco Systems Inc. soared ~1.5% on Tuesday, after people familiar with the event confirmed that Cisco initiated talks to purchase optical chip technology company Luxtera Inc.
Although Cisco - the biggest maker of networking equipment - and representatives for Luxtera are yet to confirm this ongoing negotiation, sources have confirmed that Cisco has beaten several rival bids coming from companies like Intel Corp. (INTC) and Broadcom Inc. (AVGO) to reach this advanced stage of negotiation.
According to sources, the transaction has not yet been completed, nor has the final price for the closely held company been determined. But it is highly likely that Luxtera would be valued in the hundreds of millions of dollars.
Luxtera develops silicon photonics technology, which helps in converting information encoded into photons and carried over fiber optic cables directly into semiconductors - significantly speeding the transfer of data.
Adding this technology to its offerings would enable Cisco more capabilities, in terms of the components it uses to build networking machinery along with providing a more fundamental technology to differentiate its products. The additional technology may also help Cisco in rekindling its growth cycle again, which has been struggling amidst an industrywide migration to cheaper machinery that uses open-source software.
CSCO may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In of 35 cases where CSCO's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are .
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 7 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where CSCO advanced for three days, in of 318 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Momentum Indicator moved below the 0 level on April 19, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on CSCO as a result. In of 84 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for CSCO turned negative on April 15, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 47 similar instances when the indicator turned negative. In of the 47 cases the stock turned lower in the days that followed. This puts the odds of success at .
CSCO moved below its 50-day moving average on April 12, 2024 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where CSCO declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (4.378) is normal, around the industry mean (9.833). P/E Ratio (15.201) is within average values for comparable stocks, (88.227). Projected Growth (PEG Ratio) (3.538) is also within normal values, averaging (1.728). Dividend Yield (0.031) settles around the average of (0.042) among similar stocks. P/S Ratio (3.571) is also within normal values, averaging (23.832).
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. CSCO’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. CSCO’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 90, placing this stock worse than average.
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
a manufacturer of Internet Protocol based networking products and services related to the communications and information technology industry
Industry TelecommunicationsEquipment