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Cisco (NASDAQ:CSCO) competes with Juniper (NYSE:JNPR) and Alcatel-Lucent (NYSE:ALU) in the router market. We currently have a Trefis price estimate of $25.58 for Cisco’s stock, 5% above the current market price of around $24.

Trefis members have created forecasts for two key drivers of Cisco’s share value over the last week: (1) Enterprise Router Market Size and (2) Routers Gross Profit Margin. Their forecasts suggest that Cisco’s enterprise router market size will trend above the Trefis forecast, while the company’s router profit margins will trend roughly in line with our forecast. These projections indicate a combined upside of around 1% for Cisco’s stock.

We estimate that routers constitute about 16% of the $26 Trefis price estimate for Cisco’ stock. Hence the stock is not significantly impacted by (1) Enterprise Router Market Size and (2) Routers Gross Profit Margin. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.

1. Enterprise Router Market Size

The average of forecasts for Enterprise Router Market Size created by Trefis members indicated a projected increase from around $4 billion in 2010 to $7 billion by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from close to $4 billion in 2010 to $6 billion by 2016.

In the past, Enterprise Router Market Size has increased from $3 billion in 2003 to $3.50 billion in 2009. The estimates of our members imply an upside of 1% to the Trefis price estimate for Cisco’s stock.

Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Cisco’s stock to Enterprise Router Market Size.

Our complete analysis for Enterprise Router Market Size is here.

2. Routers Gross Profit Margin

The average of forecasts for Routers Gross Profit Margin created by Trefis members indicates a projected increase from around 69% in 2010 to 70% by the end of the Trefis forecast period, in line with the baseline Trefis estimate of an increase from around 68% in 2010 to 69% by 2016.

In the past, Routers Gross Profit Margin has increased from 65% in 2003 to around 68% in 2009. The member estimates imply a small upside to the Trefis price estimate for Cisco’s stock.

Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Cisco’s stock to Routers Gross Profit Margin.

Disclosure: No positions

Source: Growing Enterprise Router Market Yields Small Upside for Cisco