Cisco (CSCO) Hits 52-Week High on Security Market Growth
Shares of Cisco Systems Inc.CSCO rallied to a 52-week high of $38.37, eventually closing a bit lower at $38.15 on Dec 13. Notably, the stock has returned 26.3% year to date, outperforming the industry’s gain of 25%.
Cisco is benefiting from its expanding footprint in the rapidly growing security market. Additionally, partnerships with Telenor, Apple, IBM and Microsoft are positives in our view.
Additionally, the company’s Application Centric Infrastructure (ACI) solution is currently used by more than 4K customers. The ACI solution was recently enhanced with new features that have aided growth.
Further, the planned acquisition of Broadsoft will boost company's recurring revenue base.
Acquisitions, Partnerships and Initiatives Drive Stock
Acquisitions have played an important part in Cisco’s growth trajectory. The company’s planned acquisition of Broadsoft will deliver integrated mobile, video, voice and various other digital communication services to enterprise customers, thereby boosting the company’s collaboration business.
Cisco’s successful launch of ‘The Network Intuitive’, the company’s new intent-based networking solutions, has accelerated innovation throughout Cisco’s product portfolio, thus raising software and subscription revenues.
Cisco Systems, Inc. Revenue (TTM)
Cisco Systems, Inc. Revenue (TTM) | Cisco Systems, Inc. Quote
Cisco also entered into a partnership with International Business Machines Corporation IBM to create cyber security applications. This partnership comes at an opportune time as the cyber security market is experiencing rapid growth driven by higher spending from enterprises focused on eliminating vulnerabilities from their systems.
Cisco also announced a billion dollar initiative to fund smart cities globally, which will eventually expand the company’s global presence and boost top-line growth.
Moreover, the company's collaboration with Google Cloud to offer hybrid cloud solution is a key catalyst.
Positive Estimate Revisions
The Zacks Consensus Estimate for fiscal 2018 earnings has increased 1.7% to $2.46 over the last 30days. Moreover, the consensus estimate for fiscal 2019 has increased1.6% to $2.58 over the same time frame.
Zacks Rank &Stocks to Consider
Cisco carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks in the broader technology sector include Intel Corporation INTC and Lam Research Corporation LRCX. Both sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Intel and Lam Research is projected to be 8.42% and 14.85%, respectively.
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