CISCO STOCK IS RISING AND COULD BE A STOCK TO BUY NOW !?! | Summary and Q&A

TL;DR

Cisco's stock has not reached its all-time high from 2000, but the company has shown steady revenue and profit growth. Investing in Cisco requires considering its fundamentals and long-term value.

Key Insights

• 🙊 Cisco's stock has not reached its 2000 peak, but its revenue and profit have shown significant growth over the years.
• 🍉 Investing in stocks should focus on long-term fundamentals rather than short-term market sentiment.
• 🥶 Cisco's robust free cash flow and manageable debt make its dividend safe and sustainable.
• 😶‍🌫️ The company's expansion into AI and cloud computing presents growth opportunities, but competition and market trends should be considered.

Transcript

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Questions & Answers

Q: Why hasn't Cisco's stock price reached its all-time high from 2000?

Despite strong revenue and profit growth, market sentiment and investor voting have resulted in the stock price not surpassing its previous peak. Overpaying for a stock can lead to long-term consequences.

Q: Is Cisco's dividend safe?

Yes, Cisco's dividend of 2.8% is sustainable, as it accounts for only 40% of their five-year free cash flow. Even in their worst cash flow year, they could afford the dividend.

Q: How has Cisco performed in the cloud computing and AI sectors?

Cisco initially missed out on the cloud computing trend but is now catching up through its WebEx platform. The company aims to leverage AI technology in its future growth plans.

Q: What are the bull and bear cases for investing in Cisco?

Bullish cases include Cisco's dominant market share in the computer network industry and its increasing profit margins. Bearish factors include the company losing market share in communication equipment and potential risks associated with partnering with AT&T.

Summary & Key Takeaways

• Cisco's stock has not reached its peak from 2000, but the company has shown consistent revenue growth, with the current year's revenue being three times higher than in 2000.

• The stock is currently trading at a P/E ratio of 17, and while its market cap is lower than its peak, it has generated strong free cash flow and pays a safe dividend.

• Cisco is focused on expanding into AI and cloud computing to capture future growth opportunities.