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Cisco: The Stock That Finally Turned The Corner

Mar. 07, 2018 12:59 PM ETCisco Systems, Inc. (CSCO)12 Comments
Apothémata Stocks profile picture
Apothémata Stocks


  • Will Cisco hit its target price of $50 a share?
  • Will Cisco see a 2.9% revenue growth rate in 2019?
  • Was it a good idea for Cisco to double its debt load?
  • Could Cisco's current EPS and P/E ratio come back to haunt it?
  • Why Cisco is still a buy in my book.


Cisco (CSCO) is known for providing networks hardware such as switches and routers. They started paying out dividends in 2011. Their dividend has grown from has grown from $0.68 cents in 2013 to $1.16 in 2018.

The company recently authorized $25 million in order to repurchase its shares. The company is saying this is in large part because of the U.S. tax bill that was passed in December of 2017. They appear to have their eye on their investors and on making them happy over the next several years.

Cisco appears to be making some great moves. Since August, their stock has climbed from $30 to $44.16 a share.

Many analysts think that Cisco's stock will move up by another 11% with the target price of the stock being around $50 a share. Many investors are excited because of the relatively new CEO Chuck Robbins that took over the company in 2015.

To better understand this company and its stock, I feel that it would be good to go over the fundamentals of the company to determine if this company is a good buy and what risk should be associated when buying this company.


When evaluating a stock, the two most important things that you need to look at are the earnings per share at the diluted price and the free cash flow of the company. The earnings per share at the diluted price of Cisco is sitting at $2.22 at the current time. That number has increased from $1.87 in 2013. That means that their earnings per share at the diluted price has increased by 18% in the last five years. This is a great increase without a doubt.

However, if the target price for this stock is at $50 a share then this number will have to increase

This article was written by

Apothémata Stocks profile picture
I am a web designer who got into the stock market about a year ago. My focus is on stocks that are rising that are backed by companies who have a solid history of producing growth for their shareholders. My focus is to find stocks that will continue to produce sustainable dividends because they are backed by companies who have strong cash flow. Finding growth and sustainable stocks is what my focus is on.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (12)

I thought the dividend was raised to $.33/quarter for 2018. That makes the annual at $1.32, not $$1.16.
PSPnomore60 profile picture
If I read this right, CSCO will continue to rise, but not as fast. Yet is pays nearly 3% while we enjoy the calm. I'll take it.
Long and holding. Got in at 29
mulligangs profile picture
Just make sure you don’t sell it at $29.
First I believe Cisco will hit 50 but it is an accounting turnaround fueled by a software license strategy. Cisco even with all the companies they bought is losing market share in a slow growth market. You stated that you don't believe that Cisco can grow the next few years the way that it has the last two years. What are you talking about. Cisco's revenues grew at over 3% this last quarter, before that they had 9 straight down revenue quarters. Robbins when to a software license revenue model. Raised the cost of ownership the waited until the deferred revenue made it appears Cisco is growing again. As the software license model works it's way through their massive install base it will push revenues higher. But Cisco is still losing market share and many other companies have superior products in segments of Cisco's market. Remember when Robbins talked about security being Cisco's savior. That market is growing at 15+%. Cisco grew 9% last quarter and 6% this quarter. Dog's aren't buying Cisco's dog food. I believe Cisco stock and revenues will do well for the next two years. Then everyone will realize the underlaying product weaknesses and their market share loses will be difficult to cover up. So for the next two years don't fight the tape!
If it’s a buy in your book, how come you are not buying it?
You mean 25 Billion for repurchase. Right?
Apothémata Stocks profile picture
Yes, 25 Billion. Sorry about that error.
khuiwong9 profile picture
Cisco is in great shape to hit $50 and then move to $60 in the horizon. Growth will pickup much more as we move further into IoT, security, and smart cities. Services will grow much faster too. It is still a good time to pick CSCO and enjoy the ride.
NRL Capital profile picture
ANET back to $290s. >20% the past couple of months. And it will continue to take marketshare from CSCO. But don't take my word for it, maybe someone named Terry Eger knows more: http://bit.ly/2HA4TtG
khuiwong9 profile picture
But within a few years, ANET can disappeared but Cisco will continue to be a monster heading to $80s.
NRL Capital profile picture
I'll take the word of the guy that hired a CSCO CEO with years in the field and not . . . you. total return from ANET the past 3 years is 400% that of CSCO. I'll take that and the future ANET brings.
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