Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol (IP)-based networking and other products related to the communications and information technology (IT) industry and provide services associated with these products and their use. The Company provides products for transporting data, voice, and video within buildings, across campuses, and globally.
We are positive on Cisco (CSCO) due to its successful transformation from a pure networking company to focus on software capabilities. We believe its innovative software offerings along with its recurring subscription-based revenue offers defensive yet meaningful growth opportunities.
We have a TECHNICAL BUY rating for CSCO. CSCO is currently trading at a P/E ratio of 17.1x. We think the multiple is attractive given the revenue growth opportunity from webscale and service providers in the long run. We are also impressed by its ability to continuously innovate new products for networking and security. In addition, the higher percentage of software contribution to revenue will mitigate the cyclicality of the sector to changes in capex spending.
 Source: Bloomberg
The share price of CSCO exhibits strong bullish sentiments. Based on our technical analysis, the share price will continue to rally to new highs:
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