Cisco Systems Inc (CSCO)

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Cisco (CSCO) Deja Vu
By: Bespoke Investment Group | November 14, 2019

Call it deja vu, but Cisco (CSCO) is seeing a repeat of its August earnings report. Back in the summer, CSCO beat on the top and bottom line but lowered guidance leading the stock to fall 8.61% the following day. Fast-forwarding to today, CSCO reported after yesterday's close with the same results. The company once again lowered guidance while beating EPS by 3 cents and revenues by $69.4 million. Although the stock's performance in response has not been quite as bad as last time around, CSCO fell over 7% on Thursday. That is the worst single-day performance for the stock since its last earnings report. Two quarters in a row now, CSCO has fallen substantially on earnings. That is quite the difference from the previous four quarters when the stock rose each time.



Last Monday, we highlighted Cisco (CSCO) in a Dividend Stock Spotlight noting that although it has an attractive dividend, the technical picture was mixed with the stock at a bit of a crossroads at the bottom of a longer-term uptrend thanks to a rough-looking shorter term. The past few months' declines have come following the aforementioned earnings report in August and a weak quarter from competitor Arista Networks (ANET) further dampening the outlook for CSCO. These catalysts since the summer in conjunction with today's declines have brought the stock under support between $45-46 and also broken the longer-term uptrend that had been in place over the past few years. Since it's high on July 15th, CSCO has declines more than 22% and shed $42.8 billion in market cap. To put that into perspective, that decline is within $1 bn of the current market caps of Advanced Micro Devices (AMD), Humana (HUM), Progressive (PGR), and Marriott Hotels (MAR).



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