Can Cisco Stock Rebound To $60?
- Cisco's product sales have slowed down post the Covid-19 pandemic.
- Customers are focusing on utilizing the inventory purchased during the pandemic.
- Overall, the outlook for Cisco stock rebounding to $60 is uncertain.
Cisco Systems is grappling with increased competition from smaller networking firms, which is affecting its growth trajectory. Despite these challenges, Cisco's stock has rebounded approximately 29% from a low of $37.50 in September 2022. However, the company's financial performance for the fourth quarter of 2024 revealed a 10% year-over-year revenue decline to $13.6 billion, alongside a 24% drop in adjusted earnings per share. Over a longer timeframe, Cisco's stock has appreciated by 25% from $40 in January 2021 to around $50 currently. This performance, however, pales in comparison to the S&P 500, which has surged by about 45% during the same period. Cisco's stock returns have been inconsistent, recording a 46% gain in 2021, a 22% loss in 2022, and a modest 9% increase in 2023. In contrast, the S&P 500 posted returns of 27% in 2021, a 19% decline in 2022, and a robust 24% gain in 2023, highlighting Cisco's underperformance in recent years. The Trefis High Quality Portfolio, which includes 30 stocks, has consistently outperformed the S&P 500 during this timeframe. Analysts currently estimate Cisco's valuation at around $55 per share, suggesting a potential upside of approximately 13% from its current market price. As the Federal Reserve maintains steady interest rates to mitigate recession fears, there are expectations for possible rate cuts in 2024, which could influence market dynamics moving forward.