Abhoy Sarkar's Avatar
published in Blogs
Sep 11, 2019

Cisco (CSCO, $49.76) stock gets outperform rating from Evercore, on investor under-appreciation

Cisco Systems shares climbed, after Evercore analyst initiated an outperform rating on the stock.

Analysts at Evercore also set a $60 price target on the networking hardware and services company’ shares. The price target represents a potential 22% upside from the stock's previous closing price of $49.21.

Evercore analyst Amit Daryanani emphasized how investors are “underappreciating” Cisco's shift towards a more predictable and free-cash-flow-focused model. Daryanani suggested that investors evaluate the stock more on a free-cash-flow-based valuation versus a traditional price-to-earnings method. 

Regarding the communications/networking industry as a whole,  Evercore indicated that investment will be focused towards technologies that bolster growing bandwidth demands with an incremental approach to 5G products. 

 

Related Ticker: CSCO

CSCO's RSI Indicator recovers from oversold territory

The RSI Oscillator for CSCO moved out of oversold territory on May 05, 2023. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 30 similar instances when the indicator left oversold territory. In of the 30 cases the stock moved higher. This puts the odds of a move higher at .

Price Prediction Chart

Technical Analysis (Indicators)

Bullish Trend Analysis

The Momentum Indicator moved above the 0 level on May 16, 2023. You may want to consider a long position or call options on CSCO as a result. In of 84 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .

The Moving Average Convergence Divergence (MACD) for CSCO just turned positive on May 11, 2023. Looking at past instances where CSCO's MACD turned positive, the stock continued to rise in of 50 cases over the following month. The odds of a continued upward trend are .

CSCO moved above its 50-day moving average on May 25, 2023 date and that indicates a change from a downward trend to an upward trend.

Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where CSCO advanced for three days, in of 319 cases, the price rose further within the following month. The odds of a continued upward trend are .

Bearish Trend Analysis

The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 8 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.

The 10-day moving average for CSCO crossed bearishly below the 50-day moving average on April 24, 2023. This indicates that the trend has shifted lower and could be considered a sell signal. In of 17 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .

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 .

CSCO broke above its upper Bollinger Band on May 18, 2023. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

The Aroon Indicator for CSCO entered a downward trend on May 15, 2023. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.

Fundamental Analysis (Ratings)

Fear & Greed

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 (4.803) is normal, around the industry mean (8.925). P/E Ratio (17.857) is within average values for comparable stocks, (57.053). Projected Growth (PEG Ratio) (2.026) is also within normal values, averaging (2.139). Dividend Yield (0.031) settles around the average of (0.043) among similar stocks. P/S Ratio (3.744) is also within normal values, averaging (24.125).

The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. CSCO’s price grows at a higher 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 consistent 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 SMR rating for this company is (best 1 - 100 worst), indicating 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 Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 87, placing this stock slightly better than average.

Notable companies

The most notable companies in this group are Cisco Systems (NASDAQ:CSCO), Nokia Corp (NYSE:NOK), Hewlett Packard Enterprise Company (NYSE:HPE), Ericsson (NASDAQ:ERIC), Juniper Networks (NYSE:JNPR), Ciena Corp (NYSE:CIEN), Maxar Technologies (NASDAQ:MAXR), Lumentum Holdings (NASDAQ:LITE), CommScope Holding Company (NASDAQ:COMM), Casa Systems (NASDAQ:CASA).

Industry description

The Telecommunications Equipment industry produces voice and data communications equipment, which includes fiber optic delivery products, digital signal processors, high-speed voice, data and video delivery. Additionally, satellite systems, global positioning systems, wireless data systems, personal communications equipment, telephone handsets and payload equipment for satellites also fall into this category. Apple Inc., QUALCOMM Incorporated and Nokia are major global players in this segment.

Market Cap

The average market capitalization across the Telecommunications Equipment Industry is 3.92B. The market cap for tickers in the group ranges from 1.59K to 203.18B. CSCO holds the highest valuation in this group at 203.18B. The lowest valued company is ABILF at 1.59K.

High and low price notable news

The average weekly price growth across all stocks in the Telecommunications Equipment Industry was 3%. For the same Industry, the average monthly price growth was 5%, and the average quarterly price growth was -2%. SIMTF experienced the highest price growth at 267%, while MLRT experienced the biggest fall at -32%.

Volume

The average weekly volume growth across all stocks in the Telecommunications Equipment Industry was 14%. For the same stocks of the Industry, the average monthly volume growth was 19% and the average quarterly volume growth was 218%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 51
P/E Growth Rating: 65
Price Growth Rating: 60
SMR Rating: 77
Profit Risk Rating: 87
Seasonality Score: 13 (-100 ... +100)
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