Cisco Systems, Inc. (NASDAQ:CSCO) stock flux has recently been causing stir among the investment community. At the end of the day, it’s only a stock’s performance that matters. With this in mind, it’s worth taking a look at the chart to get a sense of where it might be headed in the future.
How has the stock performed recently?
Cisco Systems, Inc. (NASDAQ:CSCO) in the last month has increased +1.55%. Shares are now up over the past year, outperforming the broad market by -100% and underperformed a peer group of similar companies by -30%. After the latest session, which saw the stock close at a price of $33.99, CSCO sits below its 52-week high. Cisco Systems, Inc. (NASDAQ:CSCO) has been trading in a bullish manner, based on the relative positions of the stock’s 20 and 200 day moving averages.
Of course, these surface-level price movements don’t tell us much about the direction that CSCO may be headed in the future. To do this, analysts often study the speed and magnitude of a stock’s price movements with what are known as momentum indicators. The logic is that as a stock’s momentum slows, it may be nearing key support or resistance levels and possibly the end of a current trend. Two such indicators are the RSI (Relative Strength Index) and the Stochastic %k Oscillator, which fluctuate on a scale of 0 to 100. A reading above 70 indicates that a stock is overvalued, and a reading below 30 implies that it is undervalued. The 20-day RSI for CSCO is 53.32%, which suggests that the stock is not particularly expensive or cheap, and not predisposed to a reactive price movement based on this measure. The 20-day Stochastic %k measure, which sits at 59.07%, tells a similar story, and suggests that CSCO currently trades in neutral territory.
What do the trading volumes reveal?
Price isn’t the only tool analysts use to forecast future performance. Volume patterns can also reveal some important insights. If, for instance, a stock’s volumes suddenly increase by a significant amount, it’s usually a sign that the level of conviction behind the trade is high. Investors may feel very strongly about the future direction of the stock in question. Cisco Systems, Inc. (CSCO) average trading volume of 15,974,575 during the past month is 20.03% below its average volume over the past year, indicating that investors have been less active than usual in the stock in recent times.
What do the analysts think?
CSCO is currently undervalued by -4.87% relative to the average 1-year price target of $35.73 taken from a group of Wall Street Analysts. The average investment recommendation on a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell) is 2.00, which implies that analysts are generally neutral in their outlook for CSCO over the next year.
How risky is the stock?
When analyzing a stock’s price performance, it’s essential to take risk into account. Beta, which measures a stock’s volatility relative to the overall market, can be used to gauge the level of systematic risk associated with a particular stock.
Cisco Systems, Inc. (NASDAQ:CSCO) has a beta of 1.18, compared to a beta of 1 for the market, which implies that the stock’s price movements are more extreme than the market as a whole. CSCO therefore has a above average level of market risk. During the past couple of weeks, CSCO average daily volatility was 12.28%, which is 2.82 percentage points lower than the average volatility over the past 100 days.