Cisco Systems' (CSCO) Underperform Rating Reiterated at Credit Suisse Group

(NASDAQ:CSCO) reported its EPS in the last quarter as $0.61/Share beating the analyst estimate of $0.59/Share by the difference of $0.02. It opened the session with a $15.92 price tag, later ranging from $15.85 to $16.6, the range at which the stock has traded at throughout the day. According to these analysts, the Low Revenue Estimate for Cisco Systems, 11.41 Billion and the High Revenue Estimate is 11.97 Billion.

Excluding the divestiture of the SP Video CPE business, revenue declined by 2% year over year. For the quarter ending Jan-17, 27 analysts have a mean sales target of 11,549.70 million whilst for the year ending Jul-17, 31 analysts have a mean target of 48,293.00 million. Thus showing a Surprise of 3.6 percent.

The company reported that for the quarter, product revenue was down 4% however service revenue was up 5%. This represents a $1.16 dividend on an annualized basis and a yield of 3.53%. The Moving Average SMA50 is 5.5% while SMA200 is 7.88%. The company has grown 7.49% in past 3 months and in the last five trades has moved up 1.9%.

Operating expenses as percentage of revenues increased 40 bps to 35.6% primarily owing to increase in most of the expense line items. Huge spending on marketing and sales cost a lot. The share price is now 6 percent versus its SMA20, 7.91 percent versus its SMA50, and 10.56 percent versus its SMA200. Private Bank & Trust Co. increased its stake in Cisco Systems by 43.7% in the second quarter. The total cash and cash equivalents and investments available in the United States at the end of the fiscal second quarter were $9.6 billion.

The company also recently announced a quarterly dividend, which will be paid on Wednesday, April 26th.

Cisco Systems, Inc. (NASDAQ:CSCO) now has a consensus Price Target of $33.26. Following a recent rally, Cisco's share price is now trading around the highest level since 2007. The remaining authorized amount under this program is approximately $13.4 billion.

The Wall Street consensus forecasts call for earnings that are smaller than a year ago from the networking products and services giant, which during the most recent quarter bought AppDynamics before its IPO. Shares had gained over 25 percent in the past year.

We believe that Cisco's expanding footprint in the rapidly growing security and data center market are promising. The Company delivers its technology and services to its customers as solutions for their priorities, including cloud, video, mobility, security, collaboration and analytics. I have no business relationship with any company whose stock is mentioned in this article.

Moreover, continued share buyback and dividend hikes are positive in our view. William Blair initiated coverage on Cisco Systems in a research note on Tuesday, January 17th. We believe that third-quarter revenue guidance continues to reflect these growing headwinds. The current value of the RSI is 73.17 that is in overbought range. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon.

You can see the complete list of today's Zacks #1 (Strong Buy) Rank stocks here .

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