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Hype Asset of the Day | February, 8th, 2022


Cisco Systems Inc. (NASDAQ: CSCO)

A large portion of the technology required to run the Internet is produced by Cisco Systems, a tech giant with headquarters in San Jose. Cisco Systems, Inc. engages in the design, manufacture, and sale of Internet Protocol-based networking products and services related to the communications and information technology industry. Cisco produces and markets telecommunications gear, networking hardware, software, and other technology services. With their second-quarter earnings report coming out soon, Cisco has seen an increase in mentions by 105% over the last day, prompting investors to wonder what makes the company gain so much hype. Currently, shares of Cisco Systems trade at $47.32 per share.


Positive Hype

Given its strong dividend, appealing valuation, and solid fundamentals, Cisco Systems has managed to garner a lot of positive hype. Here are some factors that contribute to the company’s appeal.


  • Shares have run hot in recent weeks, with CSCO scoring a gain of almost 24% since reaching a mid-October 52-week low of $38.60, a level that was last seen in November 2020.


  • The stock ended Tuesday’s session at $47.84, earning the San Jose, California-based networking-infrastructure company a valuation of $196.5 billion.


  • Not only do shares currently yield a market-beating 3.20%, but the tech behemoth has increased its annual dividend for 12 years in a row.


  • In addition to dividends, Cisco has also used share buybacks to return capital to shareholders, a testament to the company’s dependably profitable business and enormous cash pile.


  • Consensus estimates call for the digital communications technology conglomerate to post earnings per share of $0.86, according to Investing.com, increasing 2.8% from EPS of $0.84 in the year-ago period.


  • Fiscal Q2 revenue is forecast to rise 5.4% year-over-year to $13.4 billion. Highlighting the strength of its underlying business, Cisco has either matched or topped Wall Street’s profit expectations for 37 consecutive quarters dating back to fiscal Q4 2013, while missing revenue estimates only five times in that span.


  • An Investing Pro survey of analyst earnings revisions points to growing optimism ahead of the earnings release, with analysts raising their EPS estimates 12 times in the last 90 days, compared to six downward revisions.



Negative Hype

While Cisco is doing well for itself overall, the company has faced some difficulties in the recent past that might affect investor sentiments on the stock. Here are some of their setbacks.


  • Cisco Systems also struggled last year with supply chain disruptions, part shortages, and higher freight costs that hit its secure and agile networks unit, which represents nearly half of its revenue.


Conclusion

Despite recent volatility and the ongoing case, it seems reasonable to be bullish on Cisco and anticipate that shares will soar higher in the months to come. This is because of the company's strong balance sheet, high free cash flows, and broadly diversified business strategy, all of which have helped it survive difficult economic times in the past.


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HypeIndex is an AI platform that detects Hype in stocks and cryptos before it moves the market, providing reliable early detection for profitable investment opportunities.

The algorithm for our proprietary HypeIndex score is based on sentiment analysis, data science and machine learning.




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