Journal logo

6 Things You Didn't Know About Cisco Networking Systems, Inc.

Investors might know that Cisco Networking grew considerably in the 1990s and 2000s and that its earnings growth peaked in recent generations. Notwithstanding, investors might be less familiar with these seven inferior-known data about the networking blockbuster.

By Shamim Ahammed ZoardderPublished 2 years ago 4 min read
Like

Cisco Networking Systems (NASDAQ CSCO), one of the biggest networking companies in the world, is generally known as a slow-growth company that sells switches, routers, and other networking products. However, in Cisco's IPO in 1990, your position would be worth$ 1, If you had invested just$3.64 million now and be generating nearly$ in perennial lagniappes.

Investors might know that Cisco Networking grew considerably in the 1990s and 2000s and that its earnings growth peaked in recent generations. Notwithstanding, investors might be less familiar with these seven inferior-known data about the networking blockbuster.

Image source: Cisco.

1. Cisco is short for San Francisco

"Cisco" is short for San Francisco, the megacity where Stanford computer scientists Leonard Bosack and Sandy Lerner inaugurated the company in 1984. That is why in Cisco's early days, Bosack and Lerner averred on etching its products with the lowercase"cisco". Cisco's ensign, which may initially appear to be just a series of plumb lines, represents the Golden Gate Bridge, with the two high lines signifying the edifices.

2. Early troubles at Stanford

Bosack and his missus Lerner instituted Cisco networking when both of them were still employed at Stanford. Bosack continued working at Stanford with Cisco colleague and co-founder Kirk Lougheed, where they developed the company's first router.

Notwithstanding, it was an exact replica of Stanford's "Blue Box" router and ran an unlicensed duplicate of the university's multiple-protocol router software, which was conformed into the foundation of Cisco networking IOS.

In 1986, Bosack and Lougheed were forced to renounce from Stanford over the product's development, and the university considered writ unlawful charges against Cisco networking over the theft of its intellectual property. Notwithstanding, Stanford ultimately agreed to vest its router software and two computer boards to Cisco in 1987.

3. It was the most valuable company in the world

Cisco's price surged to nearly$ 80 at the apex of the dapple-com bubble in March 2000, making it the dearest company in the world with a call cap of$ 500 billion. Notwithstanding, that rally was not sustainable, since the stock was trading at nearly 240 times earnings. The bubble popped, and Cisco's after plunge made it an admonitory tale of the dapple-com bust.

Cisco network's stock nowise came near to its speckle-com bubble standings again. Present, Cisco has a request cap of just over$ 170 billion and trades at 18 times earnings. The most priceless company in the world present is Apple (NASDAQ AAPL), which has a request cap of$ 730 billion and trades at 17 times earnings.

Source: YCharts

4. It used to make cameras

Back in 2009, Cisco networking tried to expand its presence in consumer electronics by buying Pure Digital Technologies, the maker of the popular Flip Video camcorders, for$ 590 million. At the time, Cisco stated that connecting those cameras to the internet would allow"people to partake, publish, and ( freely) get access to tape, "which fit its" vision of visual networking."

That proclamation sounded really correspondent to the strategy GoPro (NASDAQ GPRO) unveiled five periods thereafter. At the time of the accession, Flip cameras held 75 of the handheld digital camcorder demand. But just like GoPro's cameras, Flip tape cameras were piecemeal rendered obsolete by smartphones-- and Cisco networking quietly killed the Flip two periods thereafter.

5. It sold its set-top box business to Technicolor

In 2005, Cisco networking acquired set-top box maker Scientific Atlanta for$6.9 billion to beef up its videotape streaming technologies. Those technologies strengthened Cisco's service provider vid and collaboration products, but the set-top boxes themselves were a dead weight on its top line growth.

That is why Cisco networking retailed the set-top box business to Technicolor for$ 600 million in late 2015. That is also why Cisco has reported two sets of top-line results over the onetime countless home. Last quarter, its total profit fell 3 annually, but only fell 2 after eliminating the impact of the set-top box business across all matching epochs.

6. Cybersecurity is its fastest-growing business

Cisco's fleetly-growing business is its cybersecurity unit, which grew its profit by 14 annually to$ 528 million last quarter and looked for 6 of its product profit. Cisco networking has been aggressively expanding that business through big investments and obtainments.

It also bundles its security products with its networking tackle and software, which gives it tremendous weight against subordinate stand-alone security companies like FireEye (NASDAQ FEYE)-- which is much cited as a possible usurpation target for the company.

The key takeaways

Cisco networking may be a "mature" tech stock that is commanded for income instead of growth moment, but investors should not neglect its colored history as a Stanford computer knowledge blueprint, the world's most costly company, an aspiring connected camera maker, and a growing cybersecurity company. These data indicate that Cisco is much additional than a maker of switches and routers, and investors should keep an eye on its investments in other calls.

10 stocks we like better than Cisco networking Systems

When investing geniuses David and Tom Gardner have a stock tip, it can pay to harken. After all, the newsletter they've run for over a decade, Motley Fool Stock Advisor, has tripled the demand. *

David and Tom just revealed what they believe are the 10 stylish stocks for investors to buy right now. And Cisco networking Systems was not one of them! That is right-- they allow these 10 stocks are yea better buys.

industry
Like

About the Creator

Reader insights

Be the first to share your insights about this piece.

How does it work?

Add your insights

Comments

There are no comments for this story

Be the first to respond and start the conversation.

Sign in to comment

    Find us on social media

    Miscellaneous links

    • Explore
    • Contact
    • Privacy Policy
    • Terms of Use
    • Support

    © 2024 Creatd, Inc. All Rights Reserved.