Cisco Systems Inc. (NASDAQ:CSCO) has traded under $30.00 since its earnings report, and 24/7 Wall St. wanted to compare and contrast this drop to a prior trough from years before. 

Cisco Systems saw its share price encroach $30 in January 2004, that was its highest price since 2001 after the tech bubble burst and its stock fell from grace in the 2000 to 2002 meltdown period when shares went from over $60.00 to down under $10.00.  But now Cisco is back to where it was back in early 2004 before its stock sold off significantly again.  After the haircut seen over the last week, 24/7 Wall St. wonders if this stock should really be trading under $30.00 on recent concerns.  Here is what Cisco has now that it didn’t have when shares nearly hit $30 in early 2004…..

On the "2004 looking out ahead" scenario, or the negatives today:

• Cisco has a very weak auto, financial, housing and consumer business;
• and it even hinted at the enterprise customers being spotty in the U.S.;
• In 2004, Cisco was still mostly a routing, switching, and networking company that was putting together what looked like hodge-podge units;
• Smaller competitors like Juniper (JNPR) and even smaller Foundry (FDRY) were able to win more business away because of one-item pricing;
• it was buying back stock;
• as far as an outlook at the time (18 months looking forward), in fiscal July-2005 it generated $24.8 Billion in revenues.

But it has many more positives today, and this is only a portion:

• Estimates for fiscal July-2009 (20 months ahead) expected it to post over $46 Billion revenues;
• It now has this much more under its belt…Scientific Atlanta for cable set-tops, WebEx for its beloved telepresence, more data security, more WiMAX, more ‘future tech’ all leading into Web 2.0 massive expansions;
• It announced a $16 Billion China expansion plan;
• Cisco now dominates many customer orders as being able to be able to offer a one-stop shop from the cables and all the communications equipment literally all the way down the entire line from the port on the servers to the port on your PC;
• It has an India, China, Middle East, and Europe that is eating technology orders like the countries came out of the analog cycle just yesterday;
• Now everyone asks on Alcatel-Lucent (NYSE:ALU) and Nortel (NYSE:NT)… "Who are they?";
• and it is still acting like a stock buyback monster.

The truth is that we’ve left a lot out here to keep this simple, and we’ve probably omitted or just skipped other key pieces.  But 24/7 Wall St.’s $34 target set back in January for 2007 was hit right before earnings, and we even outlined ahead of this last earnings report why 24/7 wall St. felt that Cisco stock was going to either go over $35 or fall back to under $32 based on the earnings report.  Our $36 price target was hit on Microsoft (NASDAQ:MSFT) for 2007 and 24/7 Wall St. has not set a target for Cisco Systems (CSCO) and other key tech stocks into mid-2008 as of yet.  We’ll send those out in summary to our open email distribution list before we post these individually in detail on our open site.  The average target from Wall Street analysts is between $36.00 and $37.00.

• John Chambers Q&A;
• Earnings Conference Call data;
• Last earnings report.

Jon C. Ogg
November 13, 2007

Jon Ogg produces the 24/7 Wall St. Special Situation Investing Newsletter; he does not own securities in the companies he covers.

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