Is Cisco a Good Investment?

PHOTO CREDIT: Cisco

OVERVIEW

Cisco Systems Incorporation is a company based in the United States. The company designs, manufactures, and sells networking hardware and software around the world. The company offers data center and routing products, communication software like Cisco WebX, and many others to consumers around the world. The company was founded in 1984.

Why You Should?

1. The COVID-19 pandemic has benefited Cisco. This is because companies around the world shifted to a work-from-home environment and relied on companies like Cisco in order to provide critical networking hardware and software to employees. This benefited the company and its investors.
2. Cisco will benefit from positive impacts from a Biden administration. The company does a lot of business internationally and Biden will look to mend international relations as the previous administration caused a rise in global tensions (especially in countries like China). This will benefit the company and its investors.
3. Cisco is an extremely cheap stock. The company currently trades at around 20 times earnings and has a stock price of around 50 dollars. This is extremely cheap for a technology company and might be a great value and long-term investment option in an investor’s portfolio.
4. The company has many recurring revenue streams from long-term deals with large enterprise companies. This will help the company maintain a stable revenue and income stream through rougher economic times and will help the company keep its customers for longer. This will benefit the company and its investors.

Why You Should Not?

1. Tough competition might continue to hurt the company and its investors. Some of the companies competitors include Google, Apple, Facebook, Zoom, and many others. This competition has hurt the company in the past and might continue to hurt the company and its investors in the future.
2. Cisco is a fairly old technology company The company has had to spend billions of dollars in order to shift its business in order to best meet consumers’ needs. This has caused the company to lose ground with competition and its stock price has stagnated over the past couple of years. This has hurt investors in the company.
3. The company has lost a lot of ground to Zoom, one of the most popular communication companies in the world. Cisco WebX, the company’s communication software, has fallen over the past couple of years and has not gained as much ground compared to its rivals like Zoom. This might hurt the company and its investors in the future.

MY OPINION

I think that Cisco is a decent long-term investment due to its position as a cheap investment option, the positive impacts from the pandemic and a Biden administration, as well as its system of recurring revenue streams. However, tough competition, a turnaround period caused by the companies age, and falling behind competition like Zoom might hurt the company and its investors in the future.