What Is Cisco Systems Inc’s (NASDAQ:CSCO) Share Price Doing?
Let’s talk about the popular Cisco Systems Inc (NASDAQ:CSCO). The company’s shares saw a decent share price growth in the teens level on the NasdaqGS over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine Cisco Systems’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. See our latest analysis for Cisco Systems
What is Cisco Systems worth?
According to my valuation model, the stock is currently overvalued by about 23%, trading at $38.19 compared to my intrinsic value of $30.96. Not the best news for investors looking to buy! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Cisco Systems’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from Cisco Systems?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. Though in the case of Cisco Systems, it is expected to deliver a relatively unexciting earnings growth of 9.79%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What this means for you:
Are you a shareholder? It seems like the market has well and truly priced in Cisco Systems’s future outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe Cisco Systems should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on Cisco Systems for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Cisco Systems. You can find everything you need to know about Cisco Systems in the latest infographic research report. If you are no longer interested in Cisco Systems, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
