Tech behemoth Apple Inc. (AAPL) reported a net income of $19.44 billion for the third quarter ended June 25, 2022, down 10.6% year-over-year, while its EPS came in at $1.20, down 7.7% year-over-year.
The stock trades at a rich valuation. Its forward EV/EBITDA of 18.72x is 48.7% higher than the industry average of 12.59x. Its forward Price/Cash Flow of 20.56x is 22.7% higher than the industry average of 16.76x. The stock has lost 9.8% over the past month and 12.5% year-to-date.
On the other hand, Cisco Systems, Inc. (CSCO) designs, manufactures, and sells Internet Protocol-based networking and other products related to the communications and information technology industry in the Americas, Europe, the Middle East, Africa, the Asia Pacific, Japan, and China.
On August 17, 2022, Chuck Robbins, CSCO’s Chair and CEO, said, “Full-year product orders and backlog are both at record highs and reflect the strong demand we continue to see for our innovation and the overall value we bring to our customers as they accelerate their digital transformation.”
CSCO has lost 5.7% over the past month to close the last trading session at $43.00. Also, the stock has lost 30.6% year-to-date. However, it has gained 2.5% over the past three months.
Here is what could shape CSCO’s performance in the near term:
CSCO’s forward EV/EBITDA of 8.76x is 30.4% lower than the industry average of 12.59x. Its forward Price/Cash Flow of 10.94x is 34.7% lower than the industry average of 16.76x. Moreover, its forward P/E of 14.89x is 29.8% lower than the industry average of 21.21x.
Favorable Analyst Expectations
Analysts expect CSCO’s revenue to increase 5% and 4% year-over-year in 2023 and 2024, respectively, while its EPS is expected to increase 5.1% and 7.6% year-over-year in 2023 and 2024, respectively. Moreover, its EPS is estimated to grow 6.7% per annum for the next five years. The stock surpassed EPS estimates in all four trailing quarters.
Of the 19 Wall Street analysts rating CSCO, eight rated it Buy, ten rated it Hold, and only one rated it Sell. Moreover…
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