Boston, MA 02/03/2014 (wallstreetpr) – Cisco Systems, Inc. (NASDAQ:CSCO) seems to be struggling in the market with its shares trading on a 52 week low of $19.98 and a high of $26.49. The company stock has been the subject of recent research with the latest being that of JPMorgan Chase and Co which has downgraded its stock from Neutral to Underweight. The company currently has a 50 day moving average of $21.82 and a 200 day average of $23.31, its market cap stands at $118.7 billion with a price to earnings ratio of $12.27
CSCO Margins may start declining
A deal between Dell Inc. and Cumulus network could throw Cisco Systems, Inc. (NASDAQ:CSCO) future into uncertainty in the coming years especially in the data centre switching market. According to a research by Citi Research, CSCO’s market share may decline from high of 66% in 2013 to a low of 58% as early as 2016. It is being reported that a number of customers have become disillusioned with CSCO’s hardware’s due to their high prices. With more customers opting for white box switching, Cisco profit margins could be under immense pressure in the coming few years. Switching accounts contribute 30% of Cisco’s revenue and generates up to 35% of the company’s gross profit.
Cisco Systems, Inc. (NASDAQ:CSCO) may be forced to enter into new deals with other companies as the level of competition start to take a big toil on its revenue collection avenues. It is not a surprise that the company posted that it expects its revenue to continue dropping in 2014. CSCO can turn around this events by focusing on cut costing measures and focusing more on acquiring new acquisition that will propel its status in the market. The company’s current position in the market leaves a lot to be desired especially with its upcoming second quarter results that are set for Wednesday Feb 12.
