Pay Less, Gain More: MSI, FFIV Top Cisco Systems Stock
MSI, FFIV are Cisco Systems’s peers in Communications Equipment industry that have:
1) Lower valuation (P/OpInc) compared to Cisco Systems stock
2) But higher revenue and operating income growth
This disconnect between valuation and performance could mean that you are better off buying MSI, FFIV stocks vs. CSCO stock
Individual stocks can be volatile and shake you out, but strategic allocation and diversification helps you stay invested. Our Boston-based, wealth management partner’s asset allocation approach is designed exactly for that.
- Cisco Systems Stock Jump Looks Great, But How Secure Is That Gain?
- Stronger Bet Than Cisco Systems Stock: MSI, FFIV Deliver More
- Cisco Systems Stock To $54?
- Stronger Bet Than Cisco Systems Stock: FFIV Delivers More
- Cisco Systems Stock Capital Return Hits $143 Bil
- Stronger Bet Than Cisco Systems Stock: FFIV Delivers More
Key Metrics Compared
| Metric | CSCO | MSI | FFIV |
|---|---|---|---|
| P/OpInc* | 24.1x | 22.4x | 18.1x |
| LTM OpInc Growth | -3.6% | 6.7% | 17.7% |
| 3Y Avg OpInc Growth | -3.0% | 19.2% | 21.5% |
| LTM Revenue Growth | 5.3% | 6.4% | 8.9% |
| 3Y Avg Revenue Growth | 3.4% | 9.5% | 4.2% |
OpInc = Operating Income, P/OpInc = Price To Operating Income Ratio
But do these numbers tell the full story? Read Buy or Sell CSCO Stock to see if Cisco Systems still has an edge that holds up under the hood. As a quick background, Cisco Systems (CSCO) provides Internet Protocol-based networking products, infrastructure platforms, collaboration tools, and IoT and analytics software for communications and information technology industries.
This is just one approach to evaluate investments. Trefis High Quality Portfolio evaluates much more, and is designed to reduce stock-specific risk while giving upside exposure
Is The Mismatch In Stock Price Temporary
One way to check if Cisco Systems stock is expensive now versus the other tickers would be to see how these metrics compared across companies exactly a year ago. Specifically, if there has been a marked reversal in the trend for Cisco Systems in the last 12 months, then there is a chance that the current mismatch is likely to reverse. On the other hand, a persistent underperformance in revenue and operating income growth for Cisco Systems would reinforce the conclusion that the stock is expensive compared to its peers, but may not revert soon
Key Metrics Compared 1 Yr Prior
| Metric | CSCO | MSI | FFIV |
|---|---|---|---|
| P/OpInc* | 19x | 29.9x | 20x |
| LTM OpInc Growth | -17.6% | 10.5% | 13.1% |
| 3Y Avg OpInc Growth | -4.5% | 18.5% | 22.2% |
| LTM Revenue Growth | 0.5% | 7.5% | 5.6% |
| 3Y Avg Revenue Growth | 2.6% | 9.8% | 3.5% |
OpInc = Operating Income
Additional Metrics To Consider
| Metric | CSCO | MSI | FFIV |
|---|---|---|---|
| P/S | 4.9x | 6.9x | 5.6x |
| Market Cap (Current) | $ 301.2 Bil | $ 62.3 Bil | $ 13.8 Bil |
| LTM Revenue | $ 56.65 Bil | $ 11.09 Bil | $ 3.02 Bil |
| LTM Opinc | $ 12.50 Bil | $ 2.79 Bil | $ 762.64 Mil |
| LTM Op Margin | 22.1% | 25.1% | 25.2% |
OpInc = Operating Income
Alternate buying based on valuation, while attractive, needs to be evaluated carefully from multiple angles. Such multi-factor analysis is exactly how we construct Trefis portfolio strategies. If you want upside with a smoother ride than an individual stock, consider the High Quality portfolio, which has outperformed the its benchmark – a combination of S&P 500, Russell, and S&P midcap index.