Cisco Systems Inc
Cisco Systems, Inc. (NASDAQ: CSCO) is engaged in designing and selling a range of technologies that power the Internet. The Company is integrating its platforms across networking, security, collaboration, applications, and the cloud. The Company operates through three geographic segments: the Americas; Europe, Middle East, and Africa (EMEA), and Asia Pacific, Japan, and China (APJC).
Recent Financial and Business Updates:
- Cisco concluded fiscal year 2023 on a high note, reporting impressive results in Q4. The company achieved USD 15.2 billion in revenue, marking a substantial 16% year-over-year increase. Additionally, GAAP earnings per share (EPS) reached USD 0.97, showing a remarkable 43% year-over-year growth, while non-GAAP EPS stood at USD 1.14, reflecting a strong 37% year-over-year increase. Cisco's operating cash flow for Q4 FY 2023 surged to USD 6.0 billion, representing a substantial 62% year-over-year improvement.
- The company demonstrated significant progress in its business model transformation during the quarter, with total software revenue increasing by 17% year over year, and software subscription revenue rising by 20%. Cisco's total annualized recurring revenue (ARR) reached USD 24.3 billion, showing a 5% year-over-year increase, and product ARR grew by 10% year over year. Moreover, remaining performance obligations (RPO) amounted to USD 34.9 billion, up 11% year over year, with product RPO increasing by 12%.
- For Q1 FY 2024, Cisco anticipates revenue in the range of USD 14.5 billion to USD 14.7 billion, with GAAP EPS projected to be between USD 0.79 and USD 0.84, and non-GAAP EPS between USD 1.02 and USD 1.04. Looking ahead to FY 2024, the company expects revenue to range from USD 57.0 billion to USD 58.2 billion, with GAAP EPS estimated between USD 3.19 and USD 3.32, and non-GAAP EPS anticipated to be between USD 4.01 and USD 4.08. These results and guidance reflect Cisco's continued growth and success in its transformation efforts.
Technical Observation (on the daily chart)
Currently, the stock has given a return of around 49.04% from its 52- week low dated October 13, 2022. The RSI (14 period) momentum indicator is near the overbought levels with value of 68.59, with expectations of some consolidation or some short-term correction. Moreover, the price is currently positioned above both the 21-day SMA and 50-day SMA trend-following indicators, which may act as dynamic short-term support levels.
As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Watch’ rating has been given to Cisco Systems, Inc. (NASDAQ: CSCO) at the current market price of USD 57.20 as of September 06, 2023, at 08:10 am PDT.
Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
How to Read the Charts?
The Green colour line reflects the 21-period simple moving average (SMA) while the red line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.
The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.
The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps with easier and faster execution of the order.
The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.
Technical Indicators Defined: -
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
The reference date for all price data, currency, technical indicators, support, and resistance levels is September 06, 2023. The reference data in this report has been partly sourced from REFINITIV.
Abbreviations
CMP: Current Market Price
SMA: Simple Moving Average
RSI: Relative Strength Index
USD: United States dollar
Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.
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