Investing in Cisco Systems, Inc. (NASDAQ:CSCO) is like betting on a tennis player. The competition keeps putting him on the defense. However, the player smashes a powerful return. This becomes the trend. Two sets later, the coach is commending Cisco for its performance. In this article, I will explain how Cisco Systems, Inc. (NASDAQ:CSCO)’s performance will enable it continue its upward movement and make good return for investors.
In early 2013, Cisco Systems, Inc. (NASDAQ:CSCO) announced strong second quarter numbers, due in large part to the company’s growing market share in video, cloud infrastructure, and mobility. Net sales rose to $12.1 billion, an increase of 5% year over year. Net income rose to $3.1 billion from $2.2 billion for same period in 2012, an increase of 44%. The company currently trades at a P/E of 11.86, which is more attractive than the 50.57 of Hewlett-Packard Company (NYSE:HPQ).
One reason behind the company’s strong result is its continued initiative toward creating innovative products. For example, it introduced its elastic core networking device that enables service providers to launch services within minutes. The company’s higher market share in areas such as security, wireless networking, data centers, and switching and routing is helping to provide positive returns for shareholders.
Additionally, the company’s Unified Computing System (UCS) is pulling in sales for the first time in the company’s history. Cisco Systems, Inc. (NASDAQ:CSCO) has also posted solid sales growth for its server, the x86 blade, which occupies the No. 3 position in worldwide x86 blade server and a No. 4 position in the overall server market.
Along with creating the Smart Connected Communities platform to affect the manner communities are designed, Cisco Systems, Inc. (NASDAQ:CSCO) has built a transceiver technology to cut down on power need by over 70%, compared with others. The company claims no other industry solution can cut down as much on 100 gigabit deployment costs as its product. In comparison, Juniper Networks, Inc. (NYSE:JNPR)’ Transceiver NS-500-MSX is no longer available. Meanwhile, companies are selecting Cisco’s technology to enable 4G LTE and Mobile Internet delivery.
In the past few months, Cisco Systems, Inc. (NASDAQ:CSCO) collaborated with Citrix to expand its successful desktop virtualization product. The initiative helped increase sales in cloud networking, cloud orchestration, and mobile work styles. Although Cisco shares are trading close to their 52-week high, it is anticipated that the share price will sustain upward momentum over the next 12 months, and hit a median target of $24.50. Cisco Systems, Inc. (NASDAQ:CSCO) continues to perform well despite a tough market environment in the networking and communication sector.