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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Cisco Systems, Inc. (XNAS:CSCO) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
CSCO
Name:
CISCO SYSTEMS, INC. (XNAS:CSCO)
Sector:
3.31B
Industry:
Communication Equipment
CEO:
Mr. Charles Robbins
Total Employees:
79,500
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -354.34% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF CISCO SYSTEMS, INC.(CSCO) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND COMMUNICATION EQUIPMENT INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
44.59
One Month Price Target:
$44.82
Six Month Price Target :
$46.
Likely Price in One Year's Time:
Ticker:
$47.41
Likely Trading Range Today Under (Normal Volatility)
$44.45
Price Upper limit ($) :
$44.75
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$42.75
This week:
$40.49
This month :
$36.38
Other Primary facts
Market Cap:
184.15B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
4.14B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.37%
-13.73%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$53.11
$49.22
$36.07
$39.96
Medium risk (<10%) entry points
Buy Call
Sell Call
$47.95
Buy Put:
Sell Put:
$47.12
$41.22
$42.06
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
CSCO
Sharpe Ratio:
0.63%
Comparison:
CSCO, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -51.78% lower than the industry
& is -72.58% lower than the market/S&P 500 average
Average Returns/Yield of
CSCO
Daily returns:
0.02%
Weekly returns:
0.11%
Monthly returns:
0.43%
Yearly returns:
12.89%
Comparison of returns:
Average annual returns/yield (last 3 years) is -60.06% below industry average
Classification:
CSCO, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.44
Statistical test of Returns:
CSCO has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.01%
Weekly Volatility:
4.51%
Monthly Volatility:
9.01%
Yearly Volatility:
31.22%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.28%
Volatility in last five trading days has been -36.62% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.12%
Weekly VaR:
-9.21%
Monthly VaR:
-18.41%
How Much Can the price of
CSCO
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-16%
Worst case (decline):
-63.78%
This translates to price declining to:
$37.44
This translates to price declining to:
$16.15
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
CSCO is a 29.94% riskier investment compared to the market/S&P 500 & is 11.32% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -36.41% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
CSCO
Beta in relation to market/S&P 500--0.94
Expected beta in 1 year's time:
0.648
Expected beta in 3 year's time:
0.917
Unlevered (debt free) Beta:
0.803
Beta in relation to Nasdaq (XNAS):
0.736
Beta in relation to all global stocks::
0.69
Beta Comparison & Analysis
Beta of competitors/peers::
1.24
Beta is -24.19% lower than peers
Average Industry Beta:
1.197
Beta is -21.49% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
13.19%
Sustainable growth rate is -71.14% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.044
Alpha is -389.47% below industry average alpha yield
Alpha is -283% below the market average
Analysis of Cost of Capital of
CSCO
Equity cost of capital:
0.096
Equity cost of capital is -15.53% below industry mean WACC
Unlevered (without debt) cost of capital:
8.19%
Before-tax cost of debt:
3.84%
After-tax cost of debt:
3.03%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.03%
WACC is 5.22% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$12.46
Revenue growth rate per share of (3Y):
4.32
Annual revenue growth rate is 11.30% above the industry average
EPS:
$2.85
Expected Annual growth rate of EPS (3Y):
2.11%
Expected future EPS growth rate is -86.82% lower than the Communication Equipment industry
Free cash flow (FCF) per share:
$3.27
Balance sheet equity growth per share: 18.31%
Equity growth rate per share is -891.31% lower than the industry
Debt per share
$2.17
EBITDA per share
$4.15
Valuation Analysis Today of
CSCO
P/E Ratio:
15.81
P/E Ratio of Competitors/Peers:
22.67
P/E ratio is -30.23% lower than main peers & is -57.40% lower than the industry
Stock price/value with industry average P/E ratio: $105.80
CSCO is -57.86% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $32.13
Present value of the expected future dividends only: $17.37
P/S (Price to Sales ratio):
3.58
Price to sales ratio is 56.33% above the industry mean
P/B (Price to book value ratio):
4.32
Price to free cash flow: 13.65
Price to free cash flow ratio is -63.07% lower than the industry
Net income growth rate (3Y):
10930.68%
Net income growth rate is 2297.43% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 13.00%
Dividend yeild: 3.34%
Previous Dividend: $0.38
Previous adjusted dividend: $0.38
Previous Dividend: $1.49
Expected next dividend best case: $0.39
Expected next dividend worst case: $0.37
Average dividend payment (long-term): $0.37
Average dividend increase/decrease (growth rate) % per period: 0.93%
Expected next dividend payment date: 26/07/2022
Expected next dividend record date: 07/05/2022
Expected next dividend declaration date: 17/05/2022
Previous dividend payment date: 27/04/2022
Previous dividend record date: 04/06/2022
Previous dividend declaration date: 16/02/2022
Dividend History:
2022-04-05--$0.38
2021-10-04--$0.37
2021-04-05--$0.37
2022-01-04--$0.37
2021-07-02--$0.37
2021-01-04--$0.36
Dividend growth rate is 605.20% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
21.07%
Net debt to equity ratio:
4.41%
Debt to assets ratio:
9.37%
Net debt to assets ratio:
1.96%
Debt-to-asset ratio is -83.06% below industry average
Ability to repay debt:
Interest coverage ratio:
47.06
Interest coverage ratio is 29.08% more than industry average
Looking forward:
Debt growth rate:
-20.96%
Annual debt growth is 107% higher than industry average debt growth rate
Debt repayment rate in last quarter: 18.19%
Analysis of Key Statistics
Correlation of price movement with the market:
0.738
Statistical significance of correlation:
CSCO has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.552
Stock price is 33.75% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.552
Correlation of price movement with Nasdaq (^IXIC):
0.012
Covariance of price movement with the market:
0.014
Kurtosis
11.029
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.386
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
CSCO
Gross Profit Margin Ratio:
253%
Operating Profit Margin Ratio:
27.36%
Operating profit margin is 325.45% higher than the industry
Net Profit Margin Ratio:
253%
Effective Tax Rate:
18.86%
Effective tax rate is -32.42% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
28.12%
Return on equity (ROE) is -19.05% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
12.51%
Return on assets (ROA) is 186.45% higher than the industry
Financial Leverage:
1.1x
Current Ratio:
1.62
Current ratio is -27.30% below industry average
Cash Conversion Cycle (days):
11.8
Cash conversion cycle is -81.20% below industry average
The remaining useful life of property plant & equipment is: 10.2 years
Stock based compensation to net income ratio:
3.77%
In-depth Efficiency Analysis
Revenue generated per employee:
648.8K
Each employee generates 18% more revenue than industry average revenue per employee
EBITDA generated per employee:
216.1K
Each employee generates 186% more EBITDA than industry average revenue per employee
Profit generated per employee:
151.0K
Each employee generates 512% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
41.6K
Each employee generates -2736% less free cash flow than industry average revenue per employee
Assets/Capital per employee
734.5K
Each employee generates -2736% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 3.18%
Growth rate in R&D investment/expenditure is -237.54% lower than the industry
Competitors/Peer firms of
CSCO
Broadcom Inc. (XNAS:AVGO)
ADOBE INC. (XNAS:ADBE)
INTEL CORPORATION (XNAS:INTC)
QUALCOMM INCORPORATED (XNAS:QCOM)
TEXAS INSTRUMENTS INCORPORATED (XNAS:TXN)
INTUIT INC. (XNAS:INTU)
ADVANCED MICRO DEVICES, INC. (XNAS:AMD)
APPLIED MATERIALS, INC. (XNAS:AMAT)
MICRON TECHNOLOGY, INC. (XNAS:MU)
Current Analyst Ratings
Strong buy�33%
Buy�46%
Hold�33%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
4/30/22
Revenue:
51.58B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
19.01B
32.57B
6.81B
2.13B
11.32B
9.18B
319.00M
18.44B
477.00M
365.00M
2.02B
17.18B
14.11B
12.01B
14.80B
2.79B
12.01B
Statement of Cash Flow
Date:
Period:
533.00M
Differed Income Tax :
- 98000.00K
Stock Based Compensation :
453.00M
Change in Working Capital :
- 231000.00K
Accounts Receivables:
427.00M
Other Working Capital:
- 663000.00K
Other Non-Cash Items:
- 210000.00K
Net Cash Provided by Operating Activities:
3.43B
Investments in PP&E:
- 122000.00K
Net Acquisitions:
- 336000.00K
Purchases of Investments:
- 3052000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
10/30/21
2022
Q1
7.62B
15.73B
23.35B
9.38B
1.83B
3.03B
37.59B
2.24B
38.80B
3.35B
-
4.20B
9.81B
58.39B
-
95.98B
2.26B
506.00M
816.00M
12.02B
8.45B
23.24B
9.00B
10.99B
30.04B
-
53.28B
42.62B
553.00M
- 473000.0K
-
October 30, 2021 at 12:00:00 AM
37.46B
42.70B
95.98B
-
9.50B
1.9B
2.49B
1.00M
- 1020000.00K
- 2000000.00K
-
- 406000.00K
- 1561000.00K
- 3000.00K
- 3970000.00K
-
- 1563000.00K
8.38B
9.94B
3.43B
- 122000.00K
3.31B
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
CSCO
2023
2024
2025
2026
2027
$57.63
$61.26
$65.13
$69.25
$73.62