Down 10% In A Month, Is Cisco Systems Stock Set For A Turnaround?

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Cisco Systems Inc. stock (NASDAQ: CSCO) is down 10% in the past month (21 trading days), underperforming the S&P 500 which was down almost 8% over this period. If you look at the change over the last five and ten days, too, the stock has returned -6.1% and -9.2%, underperforming the broader market on both occasions. Cisco had reported strong Q1 ’22 earnings in late November (Cisco’s fiscal year ends in July), with revenue rising from $11.9 billion in Q1 ’21 to $12.9 billion in Q1 ’22, driven primarily by rising product sales. Further, with COGS and operating expenses rising at a slower rate, operating margins jumped from 21.5% to 26.7% over this period. This led to EPS rising from $0.51 in Q1 ’21 to $0.71 in Q1 ’22. The stock rallied immediately, setting a multi-year high of around $64, before tumbling this month amidst the sell-off in the broader market.

Now, is Cisco stock set to continue its underperformance or could we expect a rally? We believe that there is a strong 77% chance of a rise in Cisco stock over the next month (21 trading days) based on our machine learning analysis of trends in the stock price over the last ten years. See our analysis on CSCO Stock Chance of Rise. For additional details about Cisco’s historical returns and comparison to peers, see Cisco (CSCO) Stock Return. Additionally, for details about CSCO revenues and comparison to peers, see Cisco (CSCO) Revenue Comparison.

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Twenty-One Day: CSCO -9.9%, vs. S&P500 -7.7%; Underperformed market

(4% likelihood event; 77% probability of rise over next 21 days)

  • CSCO stock dropped 9.9% the last twenty-one trading days (one month), compared to a broader market (S&P500) drop of 7.7%
  • A change of -9.9% or more over twenty-one trading days is a 4% likelihood event, which has occurred 103 times out of 2515 in the last ten years
  • Of these 103 instances, the stock has seen a positive movement over the next twenty-one trading days on 79 occasions
  • This points to a 77% probability for the stock rising over the next twenty-one trading days

Ten Day: CSCO -9.2%, vs. S&P500 -6.7%; Underperformed market

(3% likelihood event; 46% probability of rise over next 10 days)

  • CSCO stock dropped 9.2% over the last ten trading days (two weeks), compared to a broader market (S&P500) drop of 6.7%
  • A change of -9.2% or more over ten trading days is a 3% likelihood event, which has occurred 72 times out of 2516 in the last ten years
  • Of these 72 instances, the stock has seen a positive movement over the next ten trading days on 33 occasions
  • This points to a 46% probability for the stock rising over the next ten trading days

Five Day: CSCO -6.1%, vs. S&P500 -4.8%; Underperformed market

(4% likelihood event; 55% probability of rise over next five days)

  • CSCO stock shed 6.1% over a five-day trading period ending 1/25/2022, compared to the broader market (S&P500) drop of 4.8%
  • A change of -6.1% or more over five trading days (one week) is a 4% likelihood event, which has occurred 95 times out of 2517 in the last ten years
  • Of these 95 instances, the stock has seen a positive movement over the next five trading days on 52 occasions
  • This points to a 55% probability for the stock rising over the next five trading days

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market consistently since the end of 2016.

 Returns Jan 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 CSCO Return -13% -13% 83%
 S&P 500 Return -9% -9% 94%
 Trefis MS Portfolio Return -11% -11% 249%

[1] Month-to-date and year-to-date as of 1/26/2022
[2] Cumulative total returns since the end of 2016

 

 

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