Cisco Systems, Inc (CSCO) Stock Price, News, Quote & History
Cisco Systems (CSCO) stocks hit a streak in 2021 with the market rotation to the "value" of stocks associated with the reopening of the US economy. Prospects for CSCO's stock this year depend on trends in spending on cloud computing infrastructure, as well as corporate and telecommunications networks.
Cisco shares jumped 41% in 2021. In the face of volatility on the tech heavy Nasdaq, Cisco shares fell 12% in 2022. And CSCO shares have been trading at their 200-day moving average for several weeks.
Cisco earnings for the January quarter exceeded estimates due to component shortages and supply chain problems.
During this period, Cisco's second fiscal quarter, product orders grew 33% year-on-year, making the third consecutive quarter of 30% plus an increase in orders. Cisco said the enterprise market demand - large companies, government agencies, and medical / educational institutions - was a bright spot.
Cisco continues to raise prices due to supply chain problems.
CSCO Stock: Increase in revenue forecast
The Management Board raised its forecasts for economic growth for 2022 from 4.5-6.5% to 5.5% -6.5%. The financial year ends in July.
JPMorgan analyst Samik Chatterjee said in his report that Cisco stocks are "well placed to reap the benefits of a combination of strong demand, better pricing, and moderate costs."
Cisco's board of directors has approved an additional $ 15 billion share buyback program.
Cisco has made a $ 20 billion bid for Splunk (SPLK), a data analytics software company. Splunk expanded to security. However, Cisco and Splunk don't seem to be negotiating.
Even so, some of the technical ratings of CSCO shares are strong. Rival Arista Networks (ANET) has dropped out of the IBD leaderboard. One important question is whether Cisco can gain market share of the cloud titans compared to Arista.
On the other hand, computer network actions felt sexy again.
Cisco Stock: Switch to Software, Services
On analysts' day September 15, management updated its CSCO action guidelines. The technology icon aims to increase recurring revenue from subscription-based software and services and move away from the core business of selling network switches and routers.
Cisco said it expected subscription revenues to account for 50% of total revenues in fiscal 2025, up from 44% in fiscal 2021.
Using the just ended fiscal year 2021 as its base year, Cisco said it expected sales to grow 5% to 7% by fiscal 2025. The forecast includes acquisitions.
In addition, Cisco executives have determined how its total addressable market will reach $ 400 billion by 2025, compared to the current $ 260 billion.
During the coronavirus pandemic, corporate spending on data networks declined as office vacancy rates rose. One perception is that corporate networks will be less important if remote working becomes deeply ingrained.
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As a result, Cisco equities must increase investment in next-generation corporate networks. The company's goal is to help corporate clients build hybrid network architectures that leverage on-premises data centers and cloud computing infrastructure.
CSCO Stock: Transformational Acquisitions Needed?
Cisco intends to build the Webex videoconferencing platform against Microsoft (MSFT) and Zoom Video Communications (ZM). Recently acquired Socio Labs to expedite Webex events.
At its Cisco Live virtual conference in late March, Cisco touted "hybridization as the cornerstone of its product strategy," Morgan Stanley analyst Meta Marshall said in a note to customers.
Cisco has appointed a new chief financial officer, Scott Herren of Autodesk (ADSK). The company remains one of the top US technology companies for cash on its balance sheet. With a 4% dividend yield, CSCO shares continue to find support from institutional investors. While Cisco shares offer an attractive dividend, the buyout program has slowed down.
Building 5G wireless networks has yet to emerge as a driving force behind CSCO's growth. Cisco announced on November 16 that it would be working with Dish Network (DISH) to sell 5G business services to large companies.
Cisco. Stock Technical Analysis
From its initial public offering in 1990 to the beginning of 2000, Cisco grew as a major supplier of Internet networking equipment, both to telecommunications companies and large non-telecommunications companies. Cisco shares surged more than 100,000% over this period before the dot.com bubble burst.
From the first quarter of 2016 through the end of 2017, Cisco revenues remained stable or declined. From the beginning of 2018, revenues began to grow again, albeit in low single-digit values. This change put Cisco actions into rally mode.
Following the October 2017 breakthrough, Cisco stocks in 2019 reached new highs not seen since the late 2000s during the dot.com boom. In the current situation, Cisco shares are not included in the IBD Long Term Leaders list.
Cisco's rise in profits in 2018 was largely driven by tax changes in the Trump administration.
Growth of Cisco through acquisitions
Much of Cisco's revenue growth comes from acquisitions. In the long run, analysts expect Cisco's margins to improve as more revenue comes from software.
At the end of 2019, Cisco agreed to the purchase of British IMImobile, which sells cloud communication software, in a transaction worth $ 730 million.
In May 2020, Cisco acquired ThousandEyes, a network analytics company, for approximately $ 1 billion.
In 2017, Cisco acquired the software developer AppDynamics for $ 3.7 billion. He purchased BroadSoft for $ 1.9 billion in late 2017.
In July 2019, Cisco acquired Duo Security for $ 2.35 billion, the largest cybersecurity acquisition since the purchase of Sourcefire in 2013. The acquisition of Duo Security strengthened Cisco's emerging category of zero trust cybersecurity.
In addition to acquisitions, the new accounting policies were an added advantage when recognizing revenues. The rules known as ASC 606 require multi-year software licenses to be recognized in advance.