Stocks Analysis by Brian Gilmartin covering: Cisco Systems Inc, Splunk Inc. Read Brian Gilmartin's latest article on Investing.com
Analyst consensus is looking for $0.91 in earnings per share on $13.87 billion in revenue and $4.5 billion in operating income, for expected y-o-y growth of 5%, 7% and 8% respectively.
During the 2022 correction / bear market, Cisco fell from $64 to $40, but has recovered nicely since. Since this blog has been writing about earnings quality and how to judge a company’s earnings quality, CSCO’s cash-flow and free-cash-flow versus the trailing twelve month net income remains below 100%, but that’s with this inventory correction that has plagued Cisco the last 4 quarters. Prior to that period, Cisco’s TTM cash-flow and FCF were above 100% nicely.
The networking division which is 50% of Cisco’s total revenue and is essentially the legacy business from the 1990’s has had a tough 4 quarters, with networking revenue revenue falling from a peak of $9.5 billion in July ’23 to October ’24’s quarterly networking revenue of $6.75 billion. Another consistent theme this blog has been talking about with readers and clients, is stocks like Cisco being “non-correlated” to the megacap 7 and megacap 10 names, and also to the semiconductor leadership, which you’d expect to conclude that the stock would hold it’s value better in any bear market, or even nasty correction, since it’s not necessarily a crowded trade, or part of the momentum trading group, however that wasn’t the case in 2022.
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