Is It Time to Buy Cisco Stock?
Shares of networking hardware giant Cisco Systems (NASDAQ: CSCO) have trended lower this year, just like most other tech stocks. A 25% decline in the stock price has made it look cheap. Cisco reported adjusted earnings per share of $3.36 in fiscal 2022, which ended July 30, putting the price-to-earnings ratio at 14.
That's not a particularly optimistic valuation for a company that is the overwhelming leader in its core markets. Cisco held a 42.3% share of the ethernet switch market in the second quarter, more than quadruple its next-largest competitor. In the service provider and enterprise router market, Cisco captured roughly one-third of all sales.
Despite Cisco's dominance, the company is prone to big drops in demand when economic uncertainty runs high. Cisco's products are mission critical, but it's also easy for an enterprise customer to delay upgrades during tough economic conditions.
Source Fool.com
