Is Cisco Systems (CSCO) stock a good buy?

This is a step-by-step stock review to answer the question, is Cisco Systems (CSCO) stock a good buy?

This article will teach you how to use the 4Ms of investing. This will be a detailed walkthrough to show you how the 4Ms work and why they are important. If you are interested, you can log into Tykr to use the 4M Confidence Booster (Powered by OpenAI) which will allow you to complete a 4M Analysis in less than 60 seconds.

What are the 4Ms?

• MOS (Margin of Safety) – The MOS is the math part of investing which includes the Summary, Score, and MOS (Margin of Safety).
• Meaning – The meaning is the business model and how scalable the revenue streams are.
• Moat – The moat is how the business compares to other companies in the same Sector and Industry.
• Management – The management is the track record of the CEO.

What 4M score are we going for?

• 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
• 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
• 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.

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Table of Contents

The following links will direct you to key topics to help answer the question, is Cisco Systems (CSCO) stock a good buy?

1. Cisco Systems Company History
2. MOS
3. Meaning
4. Moat
5. Management
6. 4M Score
7. Is Cisco Systems (CSCO) stock a good buy?

1. Cisco Systems Company History

When investing in stocks, it’s important to know the company’s history. This helps us understand the various revenue streams, if they acquired other companies, how they grew through difficult times, and how they separated themselves from the competition.

• Founded in 1984: Cisco Systems was established by Leonard Bosack and Sandy Lerner, two Stanford University computer scientists.
• Initial Focus: Specialized in manufacturing and selling networking hardware, primarily routers.
• Early Success: Pioneered the concept of local area network (LAN) connectivity, facilitating data communication between different computer systems.
• IPO in 1990: Went public on the NASDAQ stock exchange under the ticker symbol CSCO, quickly becoming a leader in the tech industry.
• 1990s Expansion: Grew rapidly through acquisitions of companies like Crescendo Communications and StrataCom, expanding its product range and market reach.
• Innovative Solutions: Developed a comprehensive suite of networking solutions, including switches, security, and wireless technology.
• Global Leadership: Became the world’s largest networking company, providing products and services to businesses, governments, and service providers globally.
• 2000s Diversification: Expanded into new areas like video conferencing, cloud computing, and cybersecurity through strategic acquisitions.
• Sustainability Commitment: Focused on reducing environmental impact with energy-efficient products and sustainable business practices.
• Customer-Centric Approach: Dedicated to delivering high-quality, reliable networking solutions and exceptional customer service.
• Today: Cisco Systems is a global technology leader, driving innovation in networking, security, and cloud computing to empower digital transformation.

2. MOS (Margin Of Safety)

When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.

• Summary: Watch
• Score: 72
• MOS: 1%

To see the most up-to-date Summary, Score, and MOS, please log into Tykr.

3. Meaning

When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.

Here is how Cisco Systems makes money:

• Networking Hardware: Sells routers, switches, and other networking devices essential for building and maintaining networks.
• Security Solutions: Provides cybersecurity products and services to protect networks, data, and systems from threats.
• Collaboration Tools: Offers communication and collaboration solutions, including WebEx for video conferencing and team messaging.
• Data Center Solutions: Supplies hardware and software for data centers, including servers and storage solutions.
• Cloud Services: Provides cloud-based networking solutions and services, including cloud security and management tools.
• Software Licenses: Sells software licenses for network management, security, and other enterprise applications.
• Maintenance and Support: Earns revenue from service contracts, including technical support and software updates.
• Subscription Services: Provides subscription-based access to its software and cloud services.
• Professional Services: Offers consulting, implementation, and optimization services to help organizations deploy and use Cisco products effectively.
• Training and Certification: Generates income from training programs and certifications for IT professionals.

Here are a few of the other companies that Cisco Systems has acquired over the years. This is important because a company will use a “Buy before build” philosophy to go to market faster and add additional streams of revenue. A company with more revenue streams has a more stable business model. Keep in mind, that most companies don’t build new software because it takes too long to go to market and generate revenue.

• BroadSoft
• Meraki
• AppDynamics
• OpenDNS
• Duo Security

4. Moat

When investing in a company, it’s important to understand how a company ranks against other companies in the same sector and industry. Based on the Score, here is how Cisco Systems stacks up against other companies.

1. Ituran Location and Control Ltd.(ITRN) – 72
2. Cisco Systems, Inc.(CSCO) – 72
3. Gilat Satellite Networks Ltd.(GILT) – 67
4. Aviat Networks, Inc.(AVNW) – 61
5. Ceragon Networks Ltd.(CRNT) – 61
6. Iteris, Inc.(ITI) – 61

To see the most up-to-date Summary, Score, and MOS and each stock, please log into Tykr.

5. Management

When investing in a company, it’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.

• Transformation Strategy: Chuck Robbins Led a significant transformation of Cisco’s business model, shifting focus from hardware to software and services, including cloud solutions and cybersecurity.
• Acquisition Strategy: Drove strategic acquisitions to expand Cisco’s portfolio, including companies like AppDynamics, Duo Security, and ThousandEyes.
• Innovation in Networking: Championed advancements in networking technology, such as the development of Cisco’s intent-based networking solutions and enhanced software-defined networking.
• Cloud and Security Expansion: Expanded Cisco’s cloud and security offerings, positioning the company as a leader in secure cloud solutions and network security.
• Revenue Growth: Achieved consistent revenue growth and improved profitability through strategic investments and operational efficiencies.
• Customer Success Focus: Enhanced focus on customer success and support, leading to improved customer satisfaction and retention.
• Sustainability Initiatives: Promoted sustainability initiatives, including Cisco’s commitment to reducing its carbon footprint and supporting environmental sustainability.

7. Is Cisco Systems (CSCO) stock a good buy?

Some of the top questions investors can have is Cisco Systems (CSCO) stock a good buy or should I buy Cisco Systems (CSCO) stock?

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To truly know if Cisco Systems is a good stock to buy or sell, we recommend you log into Tykr. Within seconds you can see the Summary, Score, MOS, and 4M Score.

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