Yeah, have you noticed that Arista Networks stock is trading at $500, while Cisco's is stuck in the $50 range? Arista makes switches and routers, so does Cisco. How come their share price is almost 10 times that of Cisco?
Is Cisco disappearing in the next 3-5 yrs? LRs for the last 13 yrs and Cisco is still doing LRs, what gives?
Does Chuck and the ELT ever compare our stock to Arista's or are they too incompetent to even think about it?
15 replies (most recent on top)
Look at the market cap, not the stock price...
CSCO: $239B
ANET: $40B
Stock price does not tell the whole story.
Maybe if Arista had done 8 splits .... hmmm ..... maybe that's just too complicated for the OP
Cisco has $11.5 BILLION in debt, which is not included in P/E ratio. Or the fact our business relies on spending BILLIONS in acquisitions to keep the stock afloat. P/E ratio can be easily manipulated and is not an accurate measurement to determine the health of a company.
I hope you're not in Finance. Or at least a recent university hire that just knows high-level buzzwords.
Cisco’s debt is at an 11 year low and less than a 1/3 of what it was just 5 years ago. I’m not sure what point this guy is trying to make when he cites debt.
Now if you have two identical cakes and one cake requires constant acquisitions & "cake buybacks" to maintain its price of $10. Is that cake really a $10 cake?
Same size cake... but one cake requires an enormous amount of debt to maintain the $10 price. P/E ratio doesn't measure debt or growth.
I hope the OP isnt in finance.
Now if we take two identical cakes. Each cake cost $10. If I cut one into 10 slices. Each slice is $1. If I cut the other into 100 slices then each slice is $0.1.
Same size cake.
Clearly the market sees a bright future for Arista. Cisco..... not so much.
P/E Ratio is meaningless. Sounds like someone took an introduction to finance course on Linkedin
- How does P/E ratio take into account all of Cisco's debt? It doesn't
- How does P/E ratio take into Arista's rapid growth? It doesn't take into consideration growth companies
I will move to Arista. I heard they handout 1000 shares as a sign-on bonus to all new employees. Gheeee 1000x%500 = $500k, a cool half a milli.
Each share represents an arbitrary percentage of the companies total value, which is influenced by factors such as stock splits and the IPO.
You can better gauge the “real” value of a stock using P/E ratio. Overpriced stocks tend to have high P/E ratios and underpriced stocks tend to have low P/E ratios.
However, I agree with the previous poster that you should have a basic understanding of trading prior to providing commentary on stock price.
Also take into consideration the $40 billion in Cisco's stock buybacks. Is that sustainable when interest rates go above 1%?
Lack of a basic understanding of how a company's shares are priced is kind of a huge red flag. I don't think the OP is smart enough to be investing in stocks.
Stock market genius here.
The ELT uses the divide & distract strategy to keep the focus away from Cisco's financial performance. Social justice initiatives, diversity initiatives, and the latest buzzwords temporarily divide & distract employees.
Cisco's routers 'n switches are so legacy, even 3rd world countries would never accept them as a gift. Nobody's buy Cisco gear, well maybe a few as replacement for those which are still under warranty. Cisco will join Nortel, DEC, Sun Microsystem, etc in the tech graveyard. Rest in Pi-s, Cisco!