Inflation is still hovering around the 40-year high, and the Federal Reserve is trying to fight it by hiking interest rates. This has led the capital-intensive tech industry to witness a massive sell-off on investors’ concerns over their rising borrowing costs.
However, rising investments and increasing enterprises’ dependence on technology solutions brightens the industry’s long-term prospects. On top of it, new employment data shows employers continue to hire and grow their technology teams.
CompTIA’s analysis of the U.S. Bureau of Labor Statistics report shows that the tech sector added 25,500 net new workers in August. Tech industry employment has increased by 175,700 jobs in 2022 and is tracking 46% ahead of 2021.
The global industrial networking solutions market size is estimated to be worth $13.56 billion in 2022 and is forecast to reach $34.77 billion by 2028, growing at a CAGR of 17%.
Given the backdrop, fundamentally strong tech stocks Cisco Systems, Inc. (CSCO), Extreme Networks, Inc. (EXTR), AudioCodes Ltd. (AUDC), and Aviat Networks, Inc. (AVNW), which are trading under $50, could be ideal investments now.
Cisco Systems, Inc. (CSCO)
CSCO designs, manufactures and sells Internet Protocol-based networking and other products related to the communications and information technology industry globally. It provides infrastructure platforms, collaboration products, and security products.
On August 23, CSCO declared a quarterly cash dividend of $0.38 per common share, payable to shareholders on October 26, 2022. This reflects the shareholder return ability of the company.
In July, CSCO launched a new Webex Wholesale Route-to-Market (RTM) for Service Provider partners to address the evolving needs of SMBs. This wholesale business model is expected to harness the capabilities of the Webex suite.
CSCO’s total revenue came in at $51.56 billion for the fiscal year ended July 30, 2022, representing a 3.5% year-over-year growth. Its operating income grew 8.9% from the prior year to $13.97 billion, while its non-GAAP net income rose 3.4% from last year to $14.09 billion. EPS increased 4.3% from the prior year to $3.36.
Analysts expect CSCO’s revenue for the first quarter ending October 2022 to be $13.30 billion, indicating a 3.1% year-over-year growth. The company’s EPS for the same quarter is expected to increase 1.8% from the prior-year quarter to $0.84. Additionally, CSCO has topped consensus EPS estimates in each of the trailing four quarters, which is impressive.
CSCO has gained 1.2% intraday to close its last trading session at $45.02.
CSCO’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
CSCO has an A grade for Quality and a B for Stability. It is ranked #6 of 52 stocks in the Technology – Communication/Networking industry.
Beyond what we’ve stated above, we also provide Growth, Value, Momentum, and Sentiment grades for CSCO. Get all CSCO ratings here.
Extreme Networks, Inc. (EXTR)
EXTR is a software-driven networking solutions provider that designs, develops, and manufactures wired and wireless network infrastructure equipment and engages in software development.
On September 7, EXTR announced that Minor League Baseball (MiLB) had selected Extreme as an Official Technology Innovation Partner. Additionally, the company had been named the official Wi-Fi solution, Wi-Fi analytics solution, and WAN edge solution provider of MiLB in a five-year partnership.
On August 18, EXTR introduced the…
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