Cisco Systems (NASDAQ:CSCO) Shares Gap Up Following Strong Earnings

Cisco Systems, Inc. (NASDAQ:CSCO)’s stock price gapped up before the market opened on Thursday after the company announced better than expected quarterly earnings. The stock had previously closed at $61.29, but opened at $63.07. Cisco Systems shares last traded at $64.63, with a volume of 12,601,682 shares trading hands.

The network equipment provider reported $0.96 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.91 by $0.05. The business had revenue of $14.15 billion for the quarter, compared to the consensus estimate of $14.05 billion. Cisco Systems had a net margin of 16.96% and a return on equity of 26.08%. During the same quarter in the prior year, the firm posted $0.88 earnings per share.

Cisco Systems Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Wednesday, July 23rd. Investors of record on Thursday, July 3rd will be paid a dividend of $0.41 per share. This represents a $1.64 annualized dividend and a dividend yield of 2.58%. The ex-dividend date of this dividend is Thursday, July 3rd. Cisco Systems’s payout ratio is 71.62%.

Cisco Systems declared that its Board of Directors has initiated a stock repurchase plan on Wednesday, February 12th that permits the company to buyback $15.00 billion in outstanding shares. This buyback authorization permits the network equipment provider to reacquire up to 6% of its shares through open market purchases. Shares buyback plans are typically a sign that the company’s board believes its stock is undervalued.

Analysts Set New Price Targets

Several equities analysts recently issued reports on the stock. JPMorgan Chase & Co. upped their price objective on shares of Cisco Systems from $70.00 to $73.00 and gave the company an “overweight” rating in a research note on Thursday. Wells Fargo & Company raised shares of Cisco Systems from an “equal weight” rating to an “overweight” rating and increased their price target for the stock from $72.00 to $75.00 in a research note on Thursday. Morgan Stanley increased their price target on shares of Cisco Systems from $65.00 to $67.00 and gave the stock an “overweight” rating in a research note on Thursday. BNP Paribas raised shares of Cisco Systems from a “neutral” rating to an “outperform” rating and set a $72.00 price target on the stock in a research note on Tuesday, January 28th. Finally, The Goldman Sachs Group increased their price target on shares of Cisco Systems from $56.00 to $63.00 and gave the stock a “neutral” rating in a research note on Thursday, February 13th. Seven investment analysts have rated the stock with a hold rating, thirteen have assigned a buy rating and three have assigned a strong buy rating to the stock. According to data from MarketBeat.com, the company currently has an average rating of “Moderate Buy” and an average target price of $68.00.

Insider Activity

In related news, SVP Maria Victoria Wong sold 762 shares of the firm’s stock in a transaction on Wednesday, March 12th. The shares were sold at an average price of $60.99, for a total transaction of $46,474.38. Following the completion of the sale, the senior vice president now directly owns 44,155 shares of the company’s stock, valued at approximately $2,693,013.45. This trade represents a 1.70% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, EVP Thimaya K. Subaiya sold 2,065 shares of the firm’s stock in a transaction on Wednesday, March 12th. The shares were sold at an average price of $60.70, for a total transaction of $125,345.50. Following the sale, the executive vice president now directly owns 191,184 shares of the company’s stock, valued at approximately $11,604,868.80. The trade was a 1.07% decrease in their ownership of the stock. The disclosure for this sale can be found here. In the last 90 days, insiders have sold 14,635 shares of company stock valued at $931,901. Company insiders own 0.01% of the company’s stock.

Institutional Investors Weigh In On Cisco Systems

Large investors have recently added to or reduced their stakes in the company. FPC Investment Advisory Inc. acquired a new position in Cisco Systems during the 4th quarter worth $26,000. Navigoe LLC acquired a new position in Cisco Systems during the 4th quarter worth $26,000. Mpwm Advisory Solutions LLC acquired a new position in Cisco Systems during the 4th quarter worth $26,000. JDM Financial Group LLC grew its holdings in Cisco Systems by 160.4% during the 4th quarter. JDM Financial Group LLC now owns 487 shares of the network equipment provider’s stock worth $29,000 after acquiring an additional 300 shares in the last quarter. Finally, Runnymede Capital Advisors Inc. acquired a new position in Cisco Systems during the 4th quarter worth $30,000. 73.33% of the stock is owned by institutional investors and hedge funds.

Cisco Systems Stock Performance

The company has a market capitalization of $253.10 billion, a price-to-earnings ratio of 27.78, a price-to-earnings-growth ratio of 4.16 and a beta of 0.89. The company has a debt-to-equity ratio of 0.43, a quick ratio of 0.79 and a current ratio of 0.87. The company’s fifty day simple moving average is $58.75 and its two-hundred day simple moving average is $59.66.

Cisco Systems Company Profile

Cisco Systems, Inc designs, manufactures, and sells Internet Protocol based networking and other products related to the communications and information technology industry in the Americas, Europe, the Middle East, Africa, the Asia Pacific, Japan, and China. The company also offers switching portfolio encompasses campus switching as well as data center switching; enterprise routing portfolio interconnects public and private wireline and mobile networks, delivering highly secure, and reliable connectivity to campus, data center and branch networks; wireless products include wireless access points and controllers; and compute portfolio including the cisco unified computing system, hyperflex, and software management capabilities, which combine computing, networking, and storage infrastructure management and virtualization.