<Cisco article> Ibexx, I found the article you posted to be a fairly shallow view of what's going on w/Csco...for example, Csco beat revenue estimates by 200m or so (and remember, these revenue estimates were constantly revised DOWNWARD by the company over quarter...and were down over 30% from previous year)...but their deferred revenue fell by 400m! One could easily argue that they are borrowing from future to make today's number....
One could also look at inventory issues, and ludicrous treatment of write-off of bad investments (Csco been trying to do this without hitting income line..)..but the bottom line is here Csco is playing w/balance sheet and statements to make their numbers, and create an appearance of a turnaround..while the evidence is rather scant that one is in place..And even if Csco were to show some sequential growth going forward (which Chambers is reluctant to state), the stock is overpriced by almost every measure.
Most financial journalists, apparently, can't read a balance sheet, or look at the only the most obvious of indicators (like P/E) to decide their spin on a piece..
What I will grant you: The market may perceive or spin this (w/help of analysts who houses likely still own tons of Csco stock) in a positive way, and that can always lead to a price bump. IMO, Csco deteriorating balance sheet, and historic outrageous simple price multiples are a better indication of where this stock is eventually going (and the market, for that matter).
Thanks for the piece, and your thoughts. good luck. |
