NASDAQ:CSCO is an undervalued gem with solid fundamentals.

Our stock screening tool has pinpointed CISCO SYSTEMS INC (NASDAQ:CSCO) as an undervalued stock. NASDAQ:CSCO maintains a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.

Assessing Valuation Metrics for NASDAQ:CSCO

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NASDAQ:CSCO has received a 7 out of 10:

• Based on the Price/Earnings ratio of 11.74, the valuation of CSCO can be described as reasonable.
• Compared to the rest of the industry, the Price/Earnings ratio of CSCO indicates a somewhat cheap valuation: CSCO is cheaper than 80.00% of the companies listed in the same industry.
• The average S&P500 Price/Earnings ratio is at 25.04. CSCO is valued rather cheaply when compared to this.
• The Price/Forward Earnings ratio is 11.22, which indicates a very decent valuation of CSCO.
• Based on the Price/Forward Earnings ratio, CSCO is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
• When comparing the Price/Forward Earnings ratio of CSCO to the average of the S&P500 Index (20.08), we can say CSCO is valued slightly cheaper.
• Based on the Enterprise Value to EBITDA ratio, CSCO is valued a bit cheaper than 78.33% of the companies in the same industry.
• Based on the Price/Free Cash Flow ratio, CSCO is valued cheaply inside the industry as 88.33% of the companies are valued more expensively.
• CSCO has an outstanding profitability rating, which may justify a higher PE ratio.

Understanding NASDAQ:CSCO's Profitability

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:CSCO has achieved a 9:

• CSCO's Return On Assets of 13.75% is amongst the best of the industry. CSCO outperforms 93.33% of its industry peers.
• CSCO's Return On Equity of 30.04% is amongst the best of the industry. CSCO outperforms 95.00% of its industry peers.
• CSCO's Return On Invested Capital of 18.79% is amongst the best of the industry. CSCO outperforms 91.67% of its industry peers.
• Measured over the past 3 years, the Average Return On Invested Capital for CSCO is significantly above the industry average of 10.94%.
• The 3 year average ROIC (16.86%) for CSCO is below the current ROIC(18.79%), indicating increased profibility in the last year.
• The Profit Margin of CSCO (23.40%) is better than 96.67% of its industry peers.
• In the last couple of years the Profit Margin of CSCO has grown nicely.
• Looking at the Operating Margin, with a value of 28.34%, CSCO belongs to the top of the industry, outperforming 96.67% of the companies in the same industry.
• CSCO has a better Gross Margin (63.69%) than 88.33% of its industry peers.

Health Examination for NASDAQ:CSCO

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:CSCO, the assigned 8 reflects its health status:

• An Altman-Z score of 3.53 indicates that CSCO is not in any danger for bankruptcy at the moment.
• With an excellent Altman-Z score value of 3.53, CSCO belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
• CSCO has a debt to FCF ratio of 0.44. This is a very positive value and a sign of high solvency as it would only need 0.44 years to pay back of all of its debts.
• CSCO has a Debt to FCF ratio of 0.44. This is amongst the best in the industry. CSCO outperforms 83.33% of its industry peers.
• CSCO has a Debt/Equity ratio of 0.15. This is a healthy value indicating a solid balance between debt and equity.
• CSCO does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

How We Gauge Growth for NASDAQ:CSCO

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NASDAQ:CSCO scores a 5 out of 10:

• CSCO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 21.47%, which is quite impressive.
• CSCO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.34% yearly.
• CSCO shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.99%.

More Decent Value stocks can be found in our Decent Value screener.

Check the latest full fundamental report of CSCO for a complete fundamental analysis.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.