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Analysis of Cisco #CSCO, an American multinational company that develops and sells network equipment primarily intended for large organizations and telecommunications enterprises.

Analysis of Cisco #CSCO, an American multinational company that develops and sells network equipment primarily intended for large organizations and telecommunications enterprises.

3 February 2021

Cisco is an American multinational company that develops and sells network equipment intended primarily for large organizations and telecommunications enterprises. The company is best known for its computer networking equipment for corporate clients. 

The company’s main competitors are mature technology companies like Dell Technologies Inc, Hewlett Packard Enterprise and Arista Networks Inc. 

Q3 Revenue: $ 11.4B (+ 0.1% YoY) 

Q3 operating income: $ 3.2B (-7% yoy) 

Q3 net income: $ 2.2B (-24% YoY) 

Earnings per share last quarter: $ 0.76, higher than $ 0.70 forecast 

The company’s operating indicators have suffered quite seriously during the pandemic. 

Distribution of revenue by business segment: 

Infrastructure Platforms – 55.01% 

Service – 27.02% 

Applications – 11.29% 

Security – 6.40% 

Other Products – 0.27% 

EPS forecast for the current quarter: $ 0.75 


At the current time, the stock is trying by all means to rise to the level of 50, then two equally probable scenarios. Either up to the last highs of 58 and possibly higher, or again down to 36/34 levels. To a greater extent, it will go along with the SNP500 index – if the market is higher, then the stock is higher, if there is a correction, it will go to the lower levels. 

The company pays fairly generous dividends; the forward yield on the company’s securities is over 3% per annum. Moreover, #CSCO is a stable company due to negative net debt on the balance sheet. The company’s operating numbers are also looking good, with a gross margin of over 60%, which is high for the industry. 
The forecast for the second quarter of 2021 looks rather optimistic – it is assumed that revenue will grow by 10%, which is a pretty good indicator for a mature company. However, investors are now more focused on the more popular stocks. The price of the company’s shares did not react in any way to the positive outlook. Thus, despite the fact that many investors perceive the company as outdated, it is still capable of generating significant cash flows. The company’s high margins and negative net debt allow the company to maintain high dividend yields, and share buybacks help keep quotes at an acceptable level.

3 February 2021
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