Benzinga - by Benzinga Insights, Benzinga Staff Writer.
In today's fast-paced and highly competitive business world, it is crucial for investors and industry followers to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating Cisco Systems (NASDAQ:CSCO) in relation to its major competitors in the Communications Equipment industry. By closely examining key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and highlight company's performance in 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 | 14.74 | 4.24 | 3.46 | 5.76% | $3.7 | $8.22 | -5.89% |
| Motorola Solutions Inc | 32.71 | 74.53 | 5.60 | 109.76% | $0.88 | $1.46 | 5.25% |
| Nokia Oyj | 27.30 | 0.88 | 0.82 | -0.21% | $0.83 | $2.38 | 14.55% |
| Juniper Networks Inc | 38.94 | 2.65 | 2.17 | 2.82% | $0.19 | $0.81 | -5.8% |
| F5 Inc | 23.61 | 3.72 | 3.88 | 4.89% | $0.2 | $0.56 | -1.11% |
| Ciena Corp | 31.84 | 2.77 | 1.85 | 3.15% | $0.13 | $0.49 | 16.32% |
| Calix Inc | 73.50 | 3.09 | 2.25 | -0.56% | $-0.0 | $0.11 | 0.34% |
| Viavi Solutions Inc | 469 | 2.87 | 2.07 | 1.53% | $0.04 | $0.15 | -10.54% |
| Extreme Networks Inc | 19.73 | 14.08 | 1.17 | 3.68% | $0.02 | $0.18 | -6.9% |
| Harmonic Inc | 18.58 | 3.43 | 2.58 | 21.56% | $0.01 | $0.08 | 1.68% |
| Digi International Inc | 69.77 | 2.01 | 2.49 | -0.56% | $0.01 | $0.06 | -2.94% |
| Aviat Networks Inc | 27.48 | 1.71 | 1.16 | 1.2% | $0.01 | $0.04 | 4.8% |
| Clearfield Inc | 36.40 | 1.44 | 2.07 | -1.71% | $-0.0 | $0.0 | -60.17% |
| Average | 72.41 | 9.43 | 2.34 | 12.13% | $0.19 | $0.53 | -3.71% |
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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 14.74 is lower than the industry average by 0.2x, suggesting potential value in the eyes of market participants.
- The current Price to Book ratio of 4.24, which is 0.45x the industry average, is substantially lower than the industry average, indicating potential undervaluation.
- The Price to Sales ratio of 3.46, which is 1.48x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
- The company has a lower Return on Equity (ROE) of 5.76%, which is 6.37% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
- The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.7 Billion, which is 19.47x above the industry average, indicating stronger profitability and robust cash flow generation.
- The company has higher gross profit of $8.22 Billion, which indicates 15.51x above the industry average, indicating stronger profitability and higher earnings from its core operations.
- The company's revenue growth of -5.89% is significantly lower compared to the industry average of -3.71%. This indicates a potential fall in the company's sales performance.
The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.
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.
In light of the Debt-to-Equity ratio, a comparison between Cisco Systems and its top 4 peers reveals the following information:
- Among its top 4 peers, Cisco Systems has a stronger financial position with a lower debt-to-equity ratio of 0.25.
- This indicates that the company relies less on debt financing and maintains a more favorable balance between debt and equity, which can be viewed positively by investors.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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