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Killexams : Cisco Representative study help - BingNews https://killexams.com/pass4sure/exam-detail/500-210 Search results Killexams : Cisco Representative study help - BingNews https://killexams.com/pass4sure/exam-detail/500-210 https://killexams.com/exam_list/Cisco Killexams : Cisco study: Network teams look to SDN, automation to manage multicloud operations

Networking teams have been challenged to provide hybrid workers with secure access to cloud-based applications, and they’re looking for greater automation and additional visibility tools to help them manage today’s diverse enterprise workloads.

That’s among the key findings of Cisco’s new Global Hybrid Cloud Trends report, which surveyed 2,500 IT decision makers in 13 countries to discern the trends and priorities of organizations that are managing workloads across multiple private, public cloud and edge computing environments. Cisco said its report is aimed at looking at how these multicloud environments impact network operations.

“We found that as businesses adapt to the changing environment, IT priorities are shifting,” wrote Thomas Scheibe, vice president of product management for Cisco cloud networking, in the report.

“For the first time, agility and business performance have overtaken cost and network management as the key concerns for IT teams, with 42% of respondents citing a more agile development environment as their top reason for moving to multiple clouds,” Scheibe stated.

At the same time, organizations are grappling with unprecedented levels of complexity and uncertainty, which is fueling a search for simplicity and security, according to Scheibe.  

As endpoints and applications become more dispersed and distributed, network complexity multiplies. While adoption of public cloud is growing, 50% of workloads are still deployed on premise. As a result, most environments will continue to be a mix of public cloud, hosted, private cloud, edge, and on-premises environments, Cisco stated. 

Copyright © 2022 IDG Communications, Inc.

Thu, 24 Nov 2022 01:15:00 -0600 en text/html https://www.networkworld.com/article/3680228/cisco-study-network-teams-look-to-sdn-automation-to-manage-multicloud-operations.html
Killexams : Cisco Shows Potential Profit Long Term (Technical Analysis)
Cisco Systems San Jose Calfornia

JasonDoiy

Cisco (NASDAQ:CSCO) used to be a mainstay of early innovation in the first stages of the Internet as it started to mature in the early 2000s. However, as more Asian competitors set in, Cisco appears to have lost its way. With more focus on security and other specialization coverage, Cisco has become a more conservative growth story for investors. Although it is less exciting than before, it does not mean that Cisco has lost its luster, as it has shown moderate performance recently in a challenging year overall.

Fundamentals Are Dull But Profitable

Ratios

Critical fundamental ratios indicate that Cisco has declined since 2018. 2018 was the most robust year for both the current and quick ratios. These ratio stats show how Asian competitors appear to hurt the potential growth of Cisco in my opinion, with dwindling ratios like this over the long run.

Metric

2018

2019

2020

2021

2022

Period

FY

FY

FY

FY

FY

Current ratio

2.287

1.506

1.720

1.490

1.432

Quick ratio

2.110

1.415

1.624

1.320

1.162

Source: Financial Modelling Prep

Growth

With a simple moving average of 50 working days, the profitable return is relatively tiny compared to other market sectors.

Sales growth has shown to be robust as potential enterprise-level corporate clientele continue to buy Cisco hardware. Also, there is an anticipated cutting back on staff to help Boost its profit margin.

Metric

2022

SMA20

0.23%

SMA50

3.48%

SMA200

-6.62%

Source: FinViz

Enterprise

The stock price declined for Cisco in 2018, while last year was the second strongest. Since 2018, this company has shown flat growth in its stock price and a substantial market cap decline for this year. Compared to this year, Cisco has underperformed compared to other technology players. As this year shows a dip in momentum, 2023 will be crucial for Cisco to show healthy growth against its competition. In addition, it might be necessary for this company to deliver innovation in new sectors to build momentum for potential stock price performance.

Metric

2018

2019

2020

2021

2022

Symbol

CSCO

CSCO

CSCO

CSCO

CSCO

Stock price

46.590

47.100

42.180

59.130

45.710

Number of shares

4.837 B

4.419 B

4.236 B

4.222 B

4.170 B

Market capitalization

225.356 B

208.135 B

178.674 B

249.647 B

190.611 B

Source: Financial Modelling Prep

Estimate

Cisco has always been a conservative company after the Internet bust in the early 2000s. However, Cisco can no longer ride out the gangbuster days of the early Internet. With more Asian-based competitors, Cisco seems to operate in a more general lower margin commodity-based security services industry. The future estimates for Cisco over the next three years look relatively conservative, with a 10% to 20% growth rating. As Cisco becomes more conservative in its calculations, one would think that it would start focusing on its dividend growth. The profit level is a little higher, but not worth investing in long-term in my view.

YEARLY ESTIMATES

2022

2023

2024

2025

Revenue

51,184

54,144

56,289

57,867

Dividend

1.50

1.54

1.59

1.64

Dividend Yield (in %)

3.35 %

3.45 %

3.55 %

3.66 %

EPS

3.35

3.52

3.80

3.95

P/E Ratio

13.35

12.69

11.78

11.32

EBIT

17,268

17,921

19,150

19,608

EBITDA

19,489

19,398

20,483

20,360

Net Profit

14,053

14,568

15,644

16,210

Net Profit Adjusted

14,053

14,568

15,644

16,210

Source: BusinessInsider

Technical Analysis Show Recovery Could Take a Little While

Fibonacci

If one was to follow the traditional methodology of placing market entries when stock price crosses above a trend line, many would wait for a very long time for this to happen with the Cisco stock. The drop is not as severe over the last year, but the pace of recovery from its 2021 historical peak may take a long time.

fibonacci cisco

fibonacci cisco (custom plstform)

Bollinger Bonds

One positive sign for Cisco is its stock price pushing up toward the upper Bollinger band. But, as said earlier, you might be waiting reasonably long to see its stock price rise excessively.

bollinger cisco

bollinger cisco (custom platform)

MACD

Even though Cisco's stock price has not fallen as severely as other big technology companies, the stock price has already broken through the zero line of the MACD signal line. Based on comparative events like this, one can see that the stock price has a high probability of pulling back to its statistical reverting mean.

macd cisco

macd cisco (custom platform)

RSI

Like the MACD, the stock price of Cisco has approached the overbought RSI condition, which means there is a higher probability of a pullback. However, one can also take away that this stock should remain reasonably flat but stable over the coming months.

With the current price range between $40 to $60, while the RSI is already pushing towards a market overbought condition, it should be worrying that the stock is so weak in terms of valuation based on the RSI. Cisco needs fresh momentum in its story to build a new narrative for excitement to hold this stock. This indicated new impetus is needed in the stock price to change the history of Cisco's product position strategy. Some suggestions for Cisco would be taking over an exciting small company within a new sector or introducing new product lines.

rsi cisco

rsi cisco (custom platform)

Prediction via Artificial Intelligence

Monte Carlo

As the predictive paths from the Monte Carlo simulation show, there is an even split of probability for market direction, either upward or downward. The same could be said in the normalized distribution chart as well. As there's no decisiveness shown in the Cisco stock price, one can take away to focus on other stocks or sectors that perform better.

monte carlo cisco

monte carlo cisco (custom platform)

Regression

As hinted by this red regression line forecasted over 30 days, it confirms the theory of how the Cisco stock price will rise moderately and then pull back. Usually, one can see a fast-moving upswing in stock price, but Cisco continues to show moderate underperforming and unexciting stock price moves.

regression cisco

regression cisco (custom platform)

Just Confusing

As shown throughout this report, various indicators show contradicting stock price signals. As a result, this builds into a conclusion that Cisco will underperform with some steadiness to show a continued small profit over the long run.

Recommendation

Selling Cisco might not be needed as market analysts are showing some growth in its stock price, which cannot be said for many companies being analyzed. However, it is safe to say that there are better stocks better higher growth stories.

Interval

RECOMMENDATION

BUY

SELL

NEUTRAL

One month

SELL

2

15

9

One week

SELL

2

16

8

One day

SELL

1

15

10

Source: Trading View

Price Target

Market analysts have excessively set relatively high targets for Cisco to meet. If this is true, fewer market analysts will track Cisco, which should not affect stock price performance.

cisco target

cisco target (custom platform)

Source: BusinessInsider

Price vs. Short Volume

One favorable situation for Cisco currently is the number of short expectations. As one can see in the lower panel, the short trading has now dropped below 50. Another reason is that investors might be deploying capital to other exciting companies in the tech sector for much higher returns.

short cisco

short cisco (custom platform )

Source: StockGrid

Insider Activity

Based on insider activity, one investor might be confused by the insider buying signals of executives accumulating Cisco stock. However, more is needed to indicate that Cisco's stock price will increase. As any investor knows, fundamentals and technical analysis should prioritize higher than just relying on insider activity to sense the market direction of any particular stock.

Date

Shares Traded

Shares Held

Price

Type

Option

Insider

Trade

2022-10-10

107,378.00

213,028.00

nan

Buy

No

Murphy Sarah Rae

107378.0

2022-10-10

25,186.00

63,344.00

nan

Buy

No

Murphy Sarah Rae

25186.0

2022-10-10

126,327.00

292,697.00

nan

Buy

No

Robbins Charles

126327.0

2022-10-10

164,225.00

437,532.00

nan

Buy

No

Murphy Sarah Rae

164225.0

2022-10-10

176,857.00

398,781.22

nan

Buy

No

Sharritts Jeffery S.

176857.0

2022-10-10

262,759.00

894,078.00

nan

Buy

No

Martinez Maria

262759.0

Source: BusinessInsider

Conclusion

With its stock price, Cisco looks like a safe bet to get a decent return over the long run. Technical analysis indicates that the timing will be far off for any potential entries to occur once the stock price recovery is entirely underway. This does not mean Cisco should be a hold but a buy instead due to its conservative future growth.

Tue, 22 Nov 2022 10:28:00 -0600 en text/html https://seekingalpha.com/article/4559981-cisco-show-potential-profit-long-term
Killexams : Cisco showcases innovations to secure organizations wherever work happens

Cisco announced new capabilities across its security portfolio so teams can be more productive and protected wherever they are working from.

Unveiled at Cisco's exact annual Partner Summit conference, the news demonstrates continued progress towards the strategic vision of the Cisco Security Cloud that will protect the integrity of an organization's entire IT ecosystem.

The end-to-end platform will safeguard users, devices and applications across public clouds and private data centers, without public cloud lock-in. 

"Security is no longer optional. It is critical to every major initiative an organization may have," said Jeetu Patel, Executive Vice President and General Manager of Security and Collaboration at Cisco. "We are committed to delivering more value for our partners by continuing to drive innovation and making it easier to do business with Cisco. Partners can land key products and then expand across the Cisco Secure portfolio to increase profitability while enabling customers to securely achieve their digital transformation goals."

Zero Trust

Duo Passwordless Authentication is now available for all customers to protect Single Sign On (SSO) applications. Users can login without any password by leveraging biometrics (Windows Hello and Mac touch ID) and security keys. Cisco is also adding the Duo Mobile app as a new option for passwordless authentication. This will simplify implementation and lower the total cost of ownership for customers, as well as better meet the needs of all end-users as global biometric adoption stalled after several years of sharp growth. Among Duo customers, biometrics were enabled on 81 percent of mobile devices.

The findings are from Cisco's 2022 Duo Trusted Access Report, also released today. The annual study is based on roughly 1.1 billion monthly global authentications, an increase of 38 percent year-over-year, across more than 49 million devices and 490 thousand unique applications.

"Passwordless authentication reduces the risk of phishing attacks and their ability to utilize stolen passwords or as we've seen more recently, MFA fatigue," said Dave Lewis, Global Advisory CISO at Cisco. "As cyberattacks continue to move closer to end-users, there is a huge opportunity to embrace low-friction authentication methods that ensure only trusted users and devices gain access to applications and corporate resources."

Network Security

Employees are going back in the office. Among Duo customers, remote access authentications declined since peaking in 2020, reaching lower than pre-pandemic levels in 2022. As hybrid work becomes the new normal, organizations are demanding high-performance network security without the increased cost.

To better meet the needs of customers, Cisco is introducing the newest addition to the Secure Firewall 3100 Series, the first firewalls purpose-built for hybrid work. Secure Firewall 3105 expands sizing options for branch offices at a price point accessible to more organizations. It empowers hybrid workers with support for more remote users and increases VPN speed and performance by 17X.

Initially launching in the US, Cisco Capital is now offering Cisco Lifecycle Pay for Secure Firewall, a Cisco Capital fixed term subscription payment solution, to provide a financial incentive and lower total cost of usage without the burden of ownership.

Customers can receive a 10 percent replacement incentive when returning existing firewall hardware and upgrading to Cisco's latest qualifying firewall technology. Cisco Capital offers a global suite of segment-and architecture-agnostic payment solutions that enable partners to better support their customers and match their buying preferences.

Secure Connectivity

As critical resources are moved into cloud, customers are concerned about data vulnerability. The challenge is only growing, as authentications to cloud applications increased 24 percent in 2022. Data needs to be protected, not just because of the risk tied to malicious threat actors, but the unintentional issues caused by inexperienced users.

To help with this, Cisco is enhancing Umbrella with stronger data loss prevention (DLP) capabilities, including unified policies and reporting across API-based out-of-band DLP, and real-time inline DLP, making management easier for security teams.

Umbrella is a foundational component of Cisco+ Secure Connect, Cisco's unified Secure Access Service Edge (SASE) solution. Highlighting their abilities with the integrated networking and security architecture, partners can now achieve SASE specialization to help customers securely enable cloud development and deployment, remote work, and edge computing.

Thu, 10 Nov 2022 02:39:00 -0600 en text/html https://www.securityinfowatch.com/cybersecurity/press-release/21286715/cisco-showcases-innovations-to-secure-organizations-wherever-work-happens
Killexams : Cisco Just Demonstrated the Power of Stock Buybacks

Networking-equipment giant Cisco Systems (CSCO -0.49%) reported results this Wednesday, covering the first quarter of fiscal-year 2023. The company generated adjusted earnings of $0.86 per diluted share, surpassing Wall Street's consensus earnings estimate of $0.84 per share.

Investors and analysts applauded Cisco's strong results, and the stock price closed 5% higher on Thursday. However, I don't see a ton of headlines mentioning one of Cisco's most shareholder-friendly qualities: The company is shoveling billions of dollars straight into the pockets of shareholders. I'm particularly impressed by Cisco's effective use of stock buybacks.

Cisco's buybacks make a difference

Fun fact: If not for the anti-dilutive effects of the buyback program, Cisco would barely have satisfied the consensus-earnings target.

Cisco's adjusted net income increased by 2% year over year, landing at $3.5 billion. At the same time, the stock-repurchasing program reduced the share count by 12 million stubs in the first quarter. The canceled stock adds up to 127 million shares on a trailing basis, which works out to a 3% reduction.

In a world where Cisco doesn't worry about share-count reductions, this-quarter's earnings would have landed at $0.84 per share, but only by the skin of its proverbial teeth. With three significant digits, you'd be looking at earnings of $0.856 per share, a rounding error away from missing the analyst target.

OK, that's no surprise

The lower share count shouldn't surprise anyone, especially since the bulk of this-year's buybacks fell in the second quarter of 2022. That period was covered in last-February's earnings update, giving everybody nine months to update their earnings estimates accordingly. The exercise above is just a bit of calculator-based entertainment, illustrating how generous Cisco's buyback program really is.

Cisco has invested an average of $1.1 billion per quarter in stock buybacks over the last three years. Dividend payments averaged $1.6 billion per quarter over the same period. That adds up to $1.69 billion of cash per quarter, sent right back to shareholders in the form of buybacks and dividends. Free cash flows in this time span averaged $3.53 billion per quarter, so the shareholder-bound cash returns consumed 48% of Cisco's average cash profits.

CSCO Stock Buybacks (Quarterly) Chart

CSCO Stock Buybacks (Quarterly) data by YCharts.

Cisco loves to share its cash profits with you, the shareholder

This generous cash return is no accident. Cisco has a history of generating massive cash flow and sharing them freely with stock owners.

On the earnings call, Cisco CFO Scott Herren said that the dividend-payout and buyback activity were "in line with our long-term objective of returning a minimum of 50% of free cash flow annually to our shareholders." That's been an official Cisco policy since the fourth quarter of 2019, three years ago.

I love seeing this shareholder-friendly policy in a veritable cash machine such as Cisco Systems. Even in an off-year like 2022, the company amassed $12.8 billion of trailing free cash flows -- and sent half of it right back to shareholders.

CSCO Free Cash Flow Chart

CSCO Free Cash Flow data by YCharts.

Today, Cisco's stock comes with a shrinking share count and a beefy dividend yield of 3.3%. You should expect the dividend payments to continue rising modestly over the years, while buybacks are adjusted to meet that 50% cash-sharing ambition, year by year. These qualities make Cisco a great buy for income investors, who value a free-flowing stream of cash profits and a tight commitment to cash-based profit sharing.

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cisco Systems. The Motley Fool has a disclosure policy.

Thu, 17 Nov 2022 22:55:00 -0600 Anders Bylund en text/html https://www.fool.com/investing/2022/11/18/cisco-demonstrated-the-power-of-stock-buybacks/
Killexams : Is It Time to Buy Cisco Stock?

Shares of networking hardware giant Cisco Systems (CSCO -0.51%) have trended lower this year, just like most other tech stocks. A 25% decline in the stock price has made it look cheap. Cisco reported adjusted earnings per share of $3.36 in fiscal 2022, which ended July 30, putting the price-to-earnings ratio at 14.

That's not a particularly optimistic valuation for a company that is the overwhelming leader in its core markets. Cisco held a 42.3% share of the ethernet switch market in the second quarter, more than quadruple its next-largest competitor. In the service provider and enterprise router market, Cisco captured roughly one-third of all sales.

Despite Cisco's dominance, the company is prone to big drops in demand when economic uncertainty runs high. Cisco's products are mission critical, but it's also easy for an enterprise customer to delay upgrades during tough economic conditions.

With a recession a possibility in 2023, is now the time to buy Cisco stock?

So far, so good

Looking at Cisco's latest quarterly results, the company appears to be doing just fine. Revenue rose 7% year over year to $13.6 billion in the fiscal first quarter ended Oct. 29, and adjusted EPS jumped 5% to $0.86.

Importantly, Cisco's guidance for the full year is optimistic. The company sees revenue growing by between 4.5% and 6.5%, with non-GAAP EPS solidly above fiscal 2022 levels.

Cisco's transformation into a solutions provider is making the company's results a bit more predictable. While selling hardware is still the core business, the company has grown into a recurring revenue powerhouse. Subscriptions generated $5.9 billion of revenue in the first quarter, about 43% of total revenue. Of that, software subscription revenue was $3.3 billion, while service subscription revenue totaled $2.5 billion.

Cisco's results this year will be partly driven by a big backlog of orders. The company expects to end the fiscal year with a backlog that's two to three times larger than historical levels. Supply chain constraints throughout the pandemic have held up hardware shipments, and any software subscriptions tied to that hardware also got caught up in the backlog. Cisco's software subscription revenue surged 11% in the first quarter, as some of those subscriptions got delivered, although the company still has more than $2 billion of software in its backlog.

Even if global economies enter recession next year, Cisco's enormous backlog and its trove of subscription revenue should help prop up sales for a while, even if underlying demand deteriorates.

Product orders are tumbling

While Cisco expects revenue to grow this year, it's already seeing its customers pulling back on new orders. Total product orders plunged 14% in the first quarter. Europe, the Middle East, and Africa was the worst geographic segment for Cisco, with product orders down 23%. The company pointed to sky-high energy prices in Europe as one reason for the pullback, but it noted that some of its product lines that focus on lowering energy consumption could do well in this environment.

While orders were down, this was still the second-largest order tally for the first quarter in Cisco's history. Cisco had a difficult comparison against an extremely strong quarter for orders last year.

And it wasn't all bad news: Product orders coming from U.S. enterprise customers grew slightly, partly offsetting weakness from other customer groups.

Cisco's order backlog gives it visibility into revenue over the next few quarters, but if product orders continue to deteriorate, the company will work through that backlog and once again be at the mercy of end-market demand. And if a recession does strike next year, a prolonged period of weak product orders seems likely.

Is Cisco stock a buy?

Cisco's dominant market position and inexpensive valuation make it one of the most appealing tech stocks to buy right now. However, anyone who's considering investing in Cisco needs to understand that the company's revenue and profits can be a bit volatile. An overloaded backlog is smoothing things out right now, but that can't last forever.

Be ready for a revenue and profit decline sometime next year if global economies continue to deteriorate. In the long run, Cisco is aiming to grow revenue and profit by 5% to 7% annually. But that won't happen every year. If you're a long-term investor able to stomach some temporary setbacks, Cisco is a great stock to buy.

Mon, 21 Nov 2022 16:20:00 -0600 Timothy Green en text/html https://www.fool.com/investing/2022/11/22/is-it-time-to-buy-cisco-stock/
Killexams : Cisco updates SD-WAN to simplify provisioning, management

Cisco is set to unveil a new edition of its SD-WAN software that will extend the system’s reach and include new management capabilities.

Among the most significant enhancements to Cisco SD-WAN release 17.10, expected in December, is the ability to use Cisco SD-WAN Multi Region Fabric (MRF) support with existing Software Defined Cloud Interconnect (SDCI) systems to significantly expand the reach and control of the SD-WAN environment. 

MRF lets customers divide their SD-WAN environments into multiple regional networks that operate distinctly from one another, along with a central core-region network for managing inter-regional traffic, according to Cisco. 

SDCI technology is used to link enterprise resources to a variety of cloud, network, and internet service providers. Cisco customers could use SDCI with their SD-WAN deployments in the past but not MRF.

By combining the two technologies and using the Cloud OnRamp Multicloud Interconnect Gateway in Cisco SD-WAN software, customers can now set network, configuration and security policies across a wide variety of locations from a central site. Cisco’s SD-WAN Cloud OnRamp links branch offices or individual remote users to cloud applications such as Cisco’s Webex, Microsoft 365, AWS, Google, Oracle, Salesforce and more.

Customers can now assign regions and roles to SD-WAN edges deployed within SDCI infrastructure, and they can segment MRF regions into multiple sub-regions and share border routers between these sub-regions, allowing for better redundancy and failover-centric network designs, according to John Joyal, senior manager, product and solutions marketing with Cisco's enterprise SD-WAN and routing group. (Joyal wrote a blog about Cisco's SD-WAN MRF enhancements.)

Copyright © 2022 IDG Communications, Inc.

Mon, 05 Dec 2022 12:57:00 -0600 en text/html https://www.networkworld.com/article/3681657/cisco-updates-sd-wan-to-simplify-provisioning-management.html
Killexams : What to expect when economic bellwether Cisco reports quarterly results

A man passes under a Cisco logo at the Mobile World Congress in Barcelona, Spain February 25, 2019.

Sergio Perez | Reuters

Club holding Cisco Systems (CSCO) is set to report fiscal first-quarter earnings after the closing bell on Wednesday, and we'll be looking to see how the technology conglomerate has weathered gathering economic headwinds.

Tue, 15 Nov 2022 07:14:00 -0600 en text/html https://www.cnbc.com/2022/11/15/what-to-expect-when-economic-bellwether-cisco-reports-results.html
Killexams : Cisco shares pop on earnings beat and increased 2023 forecast

A sign bearing the logo for communications and security tech giant Cisco Systems Inc is seen outside one of its offices in San Jose, California, August 11, 2022.

Paresh Dave | Reuters

Cisco reported fiscal first-quarter results on Wednesday that beat analysts' estimates and boosted its guidance for fiscal 2023.

The stock rose about 5% in extended trading.

Here's how the company did:

  • Earnings per share: 86 cents vs. 84 cents expected, according to Refinitiv
  • Revenue: $13.6 billion vs. $13.3 billion expected by analysts, according to Refinitiv

Revenue increased 6% year over year, while net income slid 10% to $2.7 billion. The company now expects sales growth in fiscal 2023 of 4.5% to 6.5%, up from a prior forecast that called for growth of 4% to 6%.

CFO Scott Herren said in a company release that Cisco delivered "strong results" and attributed the company's guidance forecast in part to an "easing supply situation."

While Cisco's numbers topped estimates, the company is still struggling to grow as the technology world rapidly shifts to cloud and subscription software and away from buying physical boxes. Cisco's stock price is down 27% this year, while the Nasdaq has dropped 29%.

Cisco's top business segment, which includes data-center networking switches, delivered $6.68 billion in revenue, up 12% from a year earlier.

Internet for the Future, its second-largest unit, saw revenue drop 5% to $1.3 billion. The division contains routed optical networking hardware the company picked up through its 2021 Acacia Communications acquisition.

Sales in the Collaboration segment, which features Webex, contributed $1.1 billion in revenue, down 2% year over year.

Cisco will hold its quarterly call with investors at 4:30 p.m. ET.

Wed, 16 Nov 2022 07:33:00 -0600 en text/html https://www.cnbc.com/2022/11/16/cisco-csco-earnings-q1-2023.html
Killexams : Cisco: Near-Term Downside Risks, Hold
CISCO headquarters in Silicon Valley

Sundry Photography

We're bearish on Cisco Systems, Inc. (NASDAQ:CSCO) under the current macroeconomic environment. We're excited to see Cisco's earning report for its first quarter of FY2023 (expected on 16 November), but believe weaker demand under current financial stresses will gate-keep Cisco's financial performance.

Cisco is an IP-based networking company that provides an array of differentiated services for providers, enterprises, businesses, and commercial users. More recently, the company's expanding its presence in the network security domain, and we expect this focus on security and data centers to serve as growth catalysts in the long run. In the near term, however, we believe the company will face weak demand as businesses and enterprises figure out how they will spend their 2023 budget. We expect enterprise customers that make up most of Cisco's revenue will be more hesitant to spend their budget on network security under current macroeconomic volatility. We also believe Cisco itself will be directly pressured by the macroeconomic headwinds resulting from foreign exchange headwinds. We recommend investors wait for a better entry point on Cisco stock.

Enterprise spending decisions to gate-keep growth

Cisco is among the largest players in the networking space, but we believe the company is not immune to macroeconomic headwinds impacting customer demand. The current macroeconomic environment is harsh, to say the least, with inflation at the highest it's been in 40 years. Enterprises and businesses are facing increased financial stress, and we expect this to be reflected in their spending habits regarding network security and data centers. Enterprise customers reported a 15% Y/Y growth in fiscal Q4 2022, making it Cisco's fastest-growing customer base. We expect corporate tech buyers to cut costs under inflationary pressures and rising interest rates. While we love Cisco's business model, we believe the company is vulnerable to spending cuts from its customers under current financial stresses.

Cisco also derives a significant amount of its revenue from federal, state, and local government markets. We believe this makes the company exposed to stringent budget behavior by the U.S government. We expect Cisco to grow meaningfully once macroeconomic headwinds ease, but believe the stock price remains volatile in the near term.

The following table outlines Cisco's customer market in its fiscal Q4 2022.

image4.png

Cisco's 4Q22 earnings report

Foreign exchange headwinds are also taking a toll

A significant amount of Cisco's revenue is derived from outside the U.S, around 42% in FY2021, subjecting the company to foreign exchange headwinds due to the strong U.S. dollar. We expect the company's financial performance to be exposed to exchange rates of other currencies - euro, pound, renminbi, and yen - compared to the strong U.S. dollar. We maintain our belief that Cisco will grow in the long run but expect the stock to be pressured by FX headwinds toward 2023.

Long-term growth catalysts in the network security domain

Cisco provides various products and services to service providers, enterprises, and businesses, but security and data centers take the cake for Cisco's fastest-expanding markets. We're constructive on Cisco's rapid expansion in the network security domain. The network security domain is expected to grow significantly with a CAGR of 16.7% between 2022-2030.

The following image outlines the forecasted growth in the global network security market.

image7.png

Straits

Since 2019, Cisco has been focusing its revenue growth on its secure, agile networks segment, and we expect the company to benefit from tailwinds for network security domains worldwide. The company's network security includes products and services preventing unauthorized access to systems. The company's data center products encapsulate Cisco Unified Computing Systems and Server Access Virtualization.

The following graph outlines Cisco's revenue by segment over the past few years.

image6.png

Statista

Not immune to competition

Cisco's facing stiff competition from Arista Networks, Inc. (ANET), Juniper Networks, Inc. (JNPR), Hewlett Packard Enterprise Company (HPE), Huawei, and the Ethernet switch router market. We expect competition will force Cisco's hand to offer discounts and deals to maintain its customer base. Competitors are revamping their product lines in the switch router market, and we believe Cisco needs to bring its A-game to keep up with the competition and maintain profitability.

Stock performance

Cisco grew around 27% over the past five years. YTD, the stock is down about 30% alongside the larger tech peer group. The stock underperforms the S&P (SPY) index on the YTD metric, with SPY declining 17% over the same period. Cisco's competition is also feeling the pressure of macroeconomic headwinds; Juniper is down around 15%, Arista Networks around 11%, Dell (DELL) around 25%, VMware (VMW) about 1%, Aruba (HPE) around 5%, NetGear (NTGR) around 34%, and Extreme Networks (EXTR) up almost 19%. YTD, Cisco underperforms the bulk of its competition. We expect the stock to drop further towards 2023 and recommend investors wait for a better entry point.

The following graphs outline Cisco's YTD performance compared to the index and competition.

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TechStockPros

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TechStockPros

Valuation

Cisco is relatively cheap, but we believe there is more downside to be factored into the stock. On a P/E basis, Cisco is trading at 11.6x C2024 EPS of $3.87 compared to the peer group average of 18.2x. The stock is trading at 3.0x C2024 on an EV/Sales metric versus the peer group average trading at 3.8x. We're bullish on Cisco in the long run but recommend investors wait to see how enterprise spending pans out toward the end of the year.

The following graph outlines Cisco's valuation relative to the peer group.

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TechStockPros

Word on Wall Street

Wall Street is divided on the stock. Of the 38 analysts covering the stock, 12 are buy-rated, 16 are hold-rated, and the remaining are sell-rated. We attribute the lack of a unified rating on Cisco to concerns over how near-term macroeconomic headwinds will impact the stock. Cisco is currently trading at $45. The median and mean price targets are set at $53 and $55, respectively, with a potential upside of 17-22%.

The following tables outline sell-side ratings and price targets for Cisco.

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TechStockPros

What to do with the stock

We like Cisco's position in the networking space, specifically with its growing focus on security and data center markets. We expect the security and data center markets to enjoy significant growth as the enterprise world becomes more digitized. Yet, we believe the near-term financial stresses will chokehold meaningful growth in the industry towards 2023. We expect more downside to be factored into Cisco stock in the near term and recommend investors wait for a better entry point.

Fri, 11 Nov 2022 07:09:00 -0600 en text/html https://seekingalpha.com/article/4556589-cisco-near-term-downside-risks-hold
Killexams : Is Cisco Systems Stock a Buy Now? No result found, try new keyword!Cisco's (NASDAQ: CSCO) stock price jumped 5% on Thursday, Nov. 17, after the networking hardware and software giant posted its latest earnings report. For the first quarter of fiscal 2023, which ... Sat, 19 Nov 2022 22:40:00 -0600 text/html https://www.nasdaq.com/articles/is-cisco-systems-stock-a-buy-now-1
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