Perfect Buying Opportunity For Cisco

Cisco's recent targeting scared investors because stocks have plummeted.

Currently the company goes to another model, which is a temporary obstacle.

This population still offers great value to shareholders in the meantime.

After the release of Cisco's most recent results (NASDAQ: CSCO), it was clear that investors were far from satisfied with what the administration had to say. The low guidance that was given was reason enough for many shareholders to dispose of their shares. A drop of ten percent of the stock price was the consequence. However, it is important to reconsider the company and its valuation to determine if it is advisable to follow these investors and stay away from this population or if this decrease has created the opportunity to invest at lower levels. I think this is the last, since Cisco still has great potential.

The numbers

The quarterly report that preceded the sale was issued on May 17 and contained third quarter results. While Cisco saw its sales decline of 1% year-over-year, the company managed to exceed analysts' expectations for sales and its EPS. Part of the reason for the decline in revenue is due to the fact that the third quarter was a shorter week this year compared to the previous year. That makes a difference of about 265 million, of which 200 million were in services and another 65 million SaaS business. This means that the company would not have seen revenue decline year on year if the number of weeks in the quarter had been identical. At the same time, it saw its EPS year-on-year increase of $ 0.03 to $ 0.60.

So it does not look too bad. Cisco has performed well during the quarter, with a slight drop in revenue as a result of a difference in the number of weeks. The main problem that investors have in this publication was that management had driven down year-on-year turnover from 4 to 6% for the next quarter. I understand the concern of investors facing this negative trend, but I think it is not as bad as some people think.