Benzinga - by Benzinga Insights, Benzinga Staff Writer.
In today's rapidly changing and highly competitive business world, it is vital for investors and industry enthusiasts to carefully assess companies. In this article, we will perform a comprehensive industry comparison, evaluating Cisco Systems (NASDAQ:CSCO) against its key competitors in the Communications Equipment industry. By analyzing important financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within the industry.
Cisco Systems Background Cisco Systems is the largest provider of networking equipment in the world and one of the largest software companies in the world. Its largest businesses are selling networking hardware and software (where it has leading market shares) and cybersecurity software like firewalls. It also has collaboration products, like its Webex suite, and observability tools. It primarily outsources its manufacturing to third parties and has a large sales and marketing staff—25,000 strong across 90 countries. Overall, Cisco employees 80,000 employees and sells its products globally.
CompanyP/EP/BP/SROEEBITDA (in billions)Gross Profit (in billions)Revenue Growth| Cisco Systems Inc | 15.06 | 4.34 | 3.54 | 5.76% | $3.7 | $8.22 | -5.89% |
| Motorola Solutions Inc | 34.85 | 79.40 | 5.97 | 109.76% | $0.88 | $1.46 | 5.25% |
| Nokia Oyj | 27.51 | 0.89 | 0.83 | -0.21% | $1.0 | $2.39 | -23.39% |
| Juniper Networks Inc | 38.76 | 2.66 | 2.16 | 2.82% | $0.19 | $0.81 | -5.8% |
| F5 Inc | 24.71 | 3.90 | 4.06 | 4.89% | $0.2 | $0.56 | -1.11% |
| Ciena Corp | 32.61 | 2.48 | 1.71 | 1.72% | $0.13 | $0.47 | -1.78% |
| Calix Inc | 81.05 | 3.10 | 2.27 | -0.9% | $-0.01 | $0.11 | 8.27% |
| Viavi Solutions Inc | 482 | 2.95 | 2.13 | 1.53% | $0.04 | $0.15 | -10.54% |
| Extreme Networks Inc | 19.51 | 13.93 | 1.16 | 3.68% | $0.02 | $0.18 | -6.9% |
| Harmonic Inc | 17.96 | 3.31 | 2.50 | 21.56% | $0.01 | $0.08 | 1.68% |
| Digi International Inc | 69.07 | 1.99 | 2.47 | -0.56% | $0.01 | $0.06 | -2.94% |
| Aviat Networks Inc | 28.56 | 1.78 | 1.21 | 1.2% | $0.01 | $0.04 | 4.8% |
| Clearfield Inc | 36.23 | 1.44 | 2.06 | -1.71% | $-0.0 | $0.0 | -60.17% |
| Average | 74.4 | 9.82 | 2.38 | 11.98% | $0.21 | $0.53 | -7.72% |
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.dividend-frequency { font-size: 12px; color: #6c757d; } When conducting a detailed analysis of Cisco Systems, the following trends become clear:
- The stock's Price to Earnings ratio of 15.06 is lower than the industry average by 0.2x, suggesting potential value in the eyes of market participants.
- Considering a Price to Book ratio of 4.34, which is well below the industry average by 0.44x, the stock may be undervalued based on its book value compared to its peers.
- With a relatively high Price to Sales ratio of 3.54, which is 1.49x the industry average, the stock might be considered overvalued based on sales performance.
- The company has a lower Return on Equity (ROE) of 5.76%, which is 6.22% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
- The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.7 Billion, which is 17.62x above the industry average, implying stronger profitability and robust cash flow generation.
- The gross profit of $8.22 Billion is 15.51x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
- The company's revenue growth of -5.89% is notably higher compared to the industry average of -7.72%, showcasing exceptional sales performance and strong demand for its products or services.
The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
When examining Cisco Systems in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
- Compared to its top 4 peers, Cisco Systems has a stronger financial position indicated by its lower debt-to-equity ratio of 0.25.
- This suggests that the company relies less on debt financing and has a more favorable balance between debt and equity, which can be seen as a positive attribute by investors.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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