It is extremely unlikely that cisco will be seen as a stand-alone company in a decade time from now. HPE will take over most of the enterprise market share, where as Arita’s dominance will continue in cloud . With fierce completion in security from panw and zs and new competitors emerge, Cisco’s downfall is in sight and might need shutdown some of its businesses and sell the other parts to survive further. Ciscos dependence on acquisitions won’t be a working strategy as proved bY splunk acquisition.
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Cisco Systems: Cisco has consistently reported strong operating margins, reflecting its efficient operations and market leadership.
I agree Cisco is in better shape at the moment, in part because the HPE/Juniper merger has the possibility of real risk, but in the past few quarters Cisco's operating margin has sunk from over 30% to just over 17%. I saw another post around here showing the revenue and earnings growth of a collection of networking companies and Cisco was the big loser on that list. If layoffs were the only thing to boost Cisco from the mid 40s up to the high 50s and both revenue and earnings are sinking when their competitors are growing there has to be a moment of clarity coming in the market.
Bo Fa
LOL! get a life already. HP,
Really?!? Sure buddy.
When comparing Juniper Networks, Cisco Systems, and Hewlett Packard Enterprise (HPE) over the past two years, Cisco Systems stands out with the healthiest operating margins and a robust balance sheet.
Operating Margins:
Cisco Systems: Cisco has consistently reported strong operating margins, reflecting its efficient operations and market leadership.
Juniper Networks: As of September 30, 2024, Juniper's operating margin was 6.66%, showing a decline from previous years.
Hewlett Packard Enterprise (HPE): HPE's operating margins have faced pressure due to shifts in revenue composition, particularly with the growth in AI server sales, which are margin-dilutive.
Balance Sheet Health:
Cisco Systems: Cisco maintains a strong balance sheet with substantial cash reserves and manageable debt levels, contributing to its financial stability.
Juniper Networks: As of September 30, 2024, Juniper reported total assets of $9.596 billion and total liabilities of $4.953 billion, indicating a solid equity position.
Hewlett Packard Enterprise (HPE): HPE's balance sheet reflects total assets of $57.153 billion and total liabilities of $35.915 billion as of October 31, 2023. However, recent bond market activities suggest investor concerns about increased leverage due to acquisitions.
In summary, Cisco Systems exhibits the healthiest operating margins and a strong balance sheet among the three companies, indicating superior financial health over the past two years.
Full of Corruption and lack of forward sight.
Extremely? Second place companies have endured decade long falls. IBM, Xerox, Eastman Kodak and other once first place players still survive in a much diminished capacity after far longer falls.
There is no question Cisco needs a complete technical and managerial leadership transplant if they ever want to get back to average stock market returns but there is still time if the board ever grows a backbone. High margins boost the ego saying "we're great and drop is a short term thing" like everyone did in 2000 when they kept saying the stock will blast far beyond $82 which it never did. To me this means only a catastrophic event will drive change, and at that point they'll be reacting with panic instead of acting with forethought.
As for selling off bits, what does Cisco have that is world class and sufficiently self contained that it could bring enough money to stabilize the rest? There are some nice bits of hardware but they're too intertwined with broken software shared with other hardware. If Cisco had properly integrated the management, cloud, security, etc... acquisitions selling them would be a step back, and where they haven't and they've been tainted by Cisco's lack of development culture I don't see them going for a great profit.
HPE? Neither they nor Juniper have respectable operating margins, and Cisco has proven more networking operating systems aren't a good thing. If in a couple years they've successfully joined and show better financials my position on them will change, but for now it's too much risk for an unclear reward for me to bet on them.