Will Recent News Hurt Cisco Systems Stock?

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With shares of Cisco Systems (NASDAQ:CSCO) trading around $21, is CSCO an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Cisco Systems designs, manufactures, and sells Internet protocol-based networking and other products related to communications, and provides services associated with these products and their use to information technology industries worldwide. The company provides a line of products for transporting data, voice, and video within buildings, across campuses, and around the world. Its products are designed to transform how people connect, communicate, and collaborate. Cisco operates in five segments: United States and Canada, European markets, emerging markets, Asia Pacific, and Japan.

Cisco Systems on Wednesday forecast a 6 to 8 percent revenue slide this quarter, roughly in line with Wall Street expectations, as the network gearmaker struggles with sluggish emerging markets like China. The outlook marks another severe decline in sales for the former high-flying tech company, which has blamed its poor run on a boycott of U.S. equipment after revelations of American spying efforts globally. Cisco’s outlook for the fiscal third-quarter ending April translates to a forecast for revenue of between $11.2 billion and $11.5 billion, versus the $11.3 billion analysts expect on average.

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