Can Cisco Systems Stock Turn Around After Underperforming The Market Last Month?

Signage with logo at the Silicon Valley headquarters of networking company Cisco, San Jose, … [+] California, August 17, 2017. (Photo via Smith Collection/Gado/Getty Images)

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Cisco Systems Inc. stock (NASDAQ: CSCO) is down around 2% in the past month (21 trading days), underperforming the S&P 500 which was up a little under 2% over this period. If you look at the change over the last five and ten days, too, the stock has returned -2.4% and 0.7%, underperforming the broader market on both occasions. Cisco’s recent strong Q2 ’22 earnings saw revenue rising from $11.96 billion in Q2 ’21 to $12.72 billion in Q2 ’22 (Cisco’s fiscal year ends in July). Operating expenses rose at a slightly slower rate, and operating income came in higher at $3.49 billion against $3.22 billion in Q2 ’21. Additionally, a drop in the effective tax rate and the outstanding share count helped boost EPS from $0.60 to $0.71 over this period.

Now, is Cisco stock set to continue its underperformance or could we expect a rally? We believe that there is a decent 66% chance of a rise in Cisco stock over the next month (21 trading days) based on our machine learning analysis of trends in the stock price over the last ten years. See our analysis on CSCO Stock Chance of Rise. For additional details about CSCO revenues and comparison to peers, see Cisco Revenue Comparison.

Chance of Rise

Trefis

Twenty-One Day: CSCO -2.4%, vs. S&P500 1.6%; Underperformed market

(30% likelihood event; 66% probability of rise over next 21 days)

CSCO stock dropped 2.4% the last twenty-one trading days (one month), compared to a broader market (S&P500) rise of 1.6%
A change of -2.4% or more over twenty-one trading days is a 30% likelihood event, which has occurred 746 times out of 2516 in the last ten years
Of these 746 instances, the stock has seen a positive movement over the next twenty-one trading days on 496 occasions
This points to a 66% probability for the stock rising over the next twenty-one trading days

Ten Day: CSCO 0.7%, vs. S&P500 6.7%; Underperformed market

(46% likelihood event; 55% probability of rise over next 10 days)

CSCO stock gained 0.7% over the last ten trading days (two weeks), compared to a broader market (S&P500) jump of 6.7%
A change of 0.7% or more over ten trading days is a 46% likelihood event, which has occurred 1155 times out of 2516 in the last ten years
Of these 1155 instances, the stock has seen a positive movement over the next ten trading days on 632 occasions
This points to a 55% probability for the stock rising over the next ten trading days

Five Day: CSCO -2.4%, vs. S&P500 0.1%; Underperformed market

(19% likelihood event; 57% probability of rise over next five days)

CSCO stock dropped a 2.4% over a five-day trading period ending 3/28/2022, compared to the broader market (S&P500) marginal rise of 0.1%
A change of -2.4% or more over five trading days (one week) is a 19% likelihood event, which has occurred 466 times out of 2516 in the last ten years
Of these 466 instances, the stock has seen a positive movement over the next five trading days on 264 occasions
This points to a 57% probability for the stock rising over the next five trading days

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market consistently since the end of 2016.

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