Cisco Systems (CSCO) Profile

Cisco Systems, Inc. is a global information technology and communications company that designs, manufactures, and sells networking products and related solutions in the Americas, Europe, the Middle East, Africa, Asia Pacific, Japan, and China, among other regions. The company offers a range of products that includes wireless products like access points and controllers, an enterprise routing portfolio that enables secure connections between campus, data centre, and branch networks, and a switching portfolio that covers both campus and data centre switching. The Cisco Unified Computing System, HyperFlex, and software management tools are all part of the compute portfolio. These services combine virtualisation with infrastructure management for computing, networking, and storage.

Cisco completes its $28 billion acquisition of Splunk.

The $28 billion all-cash purchase of cybersecurity and analytics startup Splunk by Cisco Systems has closed.

Completed months ahead of schedule, the deal, the biggest in Cisco history, reflects the remarkable effort many businesses are making to reimagine themselves around data and artificial intelligence.

In an interview, Chuck Robbins, the CEO of Cisco, and Gary Steele, the former CEO of Splunk and current executive vice president at Cisco, emphasised the extensive integration of artificial intelligence (AI) into the combined businesses. They stated that there are no signs suggesting a slowdown or reversal in the present era of company AI adoption.

In order to help clients adopt a more proactive approach to cybersecurity, the combined company will leverage AI to help them make connections between intelligence originating from various vendor platforms. Although the company has been working on that predictive capability for a while, they also intend to introduce additional generative AI-powered features to streamline their software and make it simpler for non-technical personnel to use the tools.

According to Steele, Splunk’s artificial intelligence will gain from Cisco’s vast datasets, worldwide reach, and sales and marketing networks.

The companies stated that they anticipated the deal to close by the end of September 2024 when it was first announced in September 2023. The procedure took about six months to finish. After regulators concluded the deal wouldn’t create obstacles to competition, the European Union granted the deal unconditional antitrust approval last week.

Bath Savings Trust Co. boosts

According to the company’s most recent disclosure to the Securities and Exchange Commission (SEC), Bath Savings Trust Co increased its investment in Cisco Systems, Inc. (NASDAQ: CSCO – Free Report) by 1.6% in the fourth quarter. After acquiring an extra 340 shares during that time, the fund owned 21,439 shares of the stock of the provider of network equipment. The amount Bath Savings Trust Co. held in Cisco Systems as of its most recent SEC filing was $1,083,000.

Recently, additional institutional investors have changed how much of Cisco Systems they own. In the third quarter, Kathleen S. Wright Associates Inc. made its market debut by purchasing shares worth $27,000. In the fourth quarter, Valued Wealth Advisors LLC made an approximate investment of $32,000 in Cisco Systems. In the same way, during the fourth and third quarters, respectively, Fortis Capital Advisors LLC and Hibernia Wealth Partners LLC each purchased new positions in the company with investments totalling roughly $34,000 and $42,000. Furthermore, VitalStone Financial LLC made an investment of roughly $45,000 to enter the market in the second quarter. Institutional investors currently own 72.21% of the company’s shares overall.

Cisco Systems Raises Dividend

Additionally, the company announced that it will pay a quarterly dividend on Wednesday, April 24. A $0.40 dividend per share will be distributed to shareholders who were of record on Thursday, April 4. Compared to Cisco Systems’ prior quarterly dividend of $0.39, this represents a favourable change. This translates to a yield of 3.27% and an annual dividend of $1.60. The date of the ex-dividend is Wednesday, April 3. The dividend payout ratio for Cisco Systems is 48.63% at the moment.

Cisco Stock: Is It safe to return capital?

Amit Daryanani, an analyst at Evercore ISI, addressed the opinions of Cisco stock bulls and bears regarding the Splunk acquisition in a report presented to clients.

The deal, according to Daryanani, “expands Cisco’s presence into the security market and enables them to be an end-to-end solution provider especially as customers look to shift towards platform centric solutions,” which is why investors are bullish on CSCO stock. Bears on the Cisco stock, he continued, alluded to the logic of the deal.

“The concern is that the deal is centered around (near-term) financial benefits — better margins/accretion vs. long-term strategic benefits — as in does it structurally change CSCO from being a share donor to share gainer in security?”

The Splunk acquisition, according to Cisco management, won’t affect capital returns to shareholders.

What is the current state of the CSCO stock?

As of 3:05 PM on Monday, March 18, the stock of Cisco Systems Inc. (CSCO) is up 0.89%, while the S&P 500 has increased by 0.86%. With 8,506,209 shares traded, CSCO is now up $0.44 from its previous closing price of $48.93. The S&P 500 has increased by 30.61% in the last year, while CSCO has decreased by -3.08%. Over the course of the previous year, CSCO earned $3.29 per share, translating into a price-to-earnings ratio of 15.02.

The most recent earnings results for Cisco Systems (NASDAQ:CSCO – Get Free Report) were released on Wednesday, February 14. The provider of network equipment reported $0.87 earnings per share for the quarter, $0.03 above analysts’ consensus estimates of $0.84. In contrast to analyst estimates of $12.71 billion, the company’s revenue for the quarter was $12.79 billion. Cisco Systems had a 23.49% net margin and a 33.01% return on equity. Revenue for Cisco Systems decreased 5.9% in comparison to the previous year. The company reported $0.76 earnings per share for the same period last year. Sell-side analysts predict that for the current year, Cisco Systems, Inc. will report 3.17 earnings per share.

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