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Cisco stock (NASDAQ:CSCO), listed on NASDAQ under CSCO, is trading at $48.50 per share, reflecting a 17% decrease from its December 2021 high of $58.70. This decline stems partly from a slowdown in product sales as customers focus on using inventory acquired after the pandemic. Additionally, major companies, including cloud service providers and telecommunications firms, have reduced network-related capital expenditures due to economic uncertainty. The company also faces increasing competition from smaller networking businesses, which has further impacted its growth.
However, there are signs of improvement. Cisco's stock has risen by about 29% from a low of $37.50 in September 2022. In the fourth quarter of 2024, Cisco reported a revenue decline of about 10% year-over-year to $13.6 billion, with adjusted earnings per share falling by 24%. Despite these declines, the figures exceeded expectations. Cisco also reported a 14% year-over-year increase in product order growth, or 6% when excluding its acquisition of Splunk, indicating some positive momentum for the company.
Over a longer period, Cisco's stock has shown gains of 25% from levels of $40 in early January 2021 to around $50 currently, compared to a 45% increase in the S&P 500 over the same period. The performance of Cisco's stock has been inconsistent, with returns of 46% in 2021, -22% in 2022, and 9% in 2023. In contrast, the S&P 500 saw returns of 27% in 2021, -19% in 2022, and 24% in 2023. This shows that Cisco underperformed the S&P 500 in 2022 and 2023, reflecting the challenges faced by individual stocks in consistently outperforming broader market indices, even for major players in the Information Technology sector.
