Cisco Systems Inc (CSCO) receives a weak valuation ranking of 33 from InvestorsObserver's data analysis. The proprietary ranking system focuses on the underlying health of a company through analysis of its stock price, earnings, and growth rate. CSCO has a better value than 33% of stocks based on these valuation analytics. Investors primarily focused on buy-and-hold strategies will find the valuation ranking relevant to their goals when making investment decisions.
CSCO has a trailing twelve month Price to Earnings (PE) ratio of 19.4. The historical average of roughly 15 shows a average value for CSCO stock as investors are paying fair share prices relative to the company's earnings. CSCO's average trailing PE ratio shows that the firm has been trading around its fair market value recently. Its trailing 12-month earnings per share (EPS) of 2.39 justifies the stock's current price. However, trailing PE ratios do not factor in the company's projected growth rate, resulting in many newer firms having high PE ratios due to high growth potential enticing investors despite inadequate earnings.
CSCO has a 12 month forward PE to Growth (PEG) ratio of 3.02. Markets are undervaluing CSCO in relation to its projected growth as its PEG ratio is currently below the fair market value of 1. 2.3900001's PEG comes from its forward price to earnings ratio being divided by its growth rate. PEG ratios are one of the most used valuation metrics due to its incorporation of more company fundamentals metrics and a focus on the firm's future rather than its past.
All together these valuation metrics paint a pretty poor picture for CSCO at its current price due to a overvalued PEG ratio due to strong growth. The PE and PEG for CSCO are worse than the average of the market resulting in a valuation score of 33.