"Mentions of Cisco spiked across r/investing in mid-November, with the tone shifting from neutral to clearly negative. One widely discussed post on r/investing captured the mood perfectly, warning that Cisco "finally made up its losses from the dotcom bubble burst 25 years ago" and cautioning that "bubbles pop and the drawdowns from that can last a really long time, ". This found resonance with 65 comments, and 53 upvotes. A comparison to Nvidia ( Nasdaq: NVDA) was also made, and easy to see."
"The concerns are rooted in valuation and momentum. Cisco trades at a trailing P/E of 30, with just 6% earnings growth year-over-year. That's a PEG ratio of 5, signaling an expensive stock relative to growth. Key reasons for the bearish turn include: A P/E that's still richer than other faster growing stocks like Alphabet (Nasdaq: GOOG) RSI above 70 since November 13, indicating overbought conditions 11 of 26 analysts rate the stock a Hold, reflecting tepid Wall Street conviction"
Cisco shares trade just under $78, up 37% over the past year and near a 52-week high. Retail investor sentiment on Reddit has plunged to 35/100 after a mid-November spike in mentions and a shift to negative tone. Valuation and momentum concerns drive bearish views: a trailing P/E of 30, 6% year-over-year earnings growth (PEG ~5), and RSI above 70 indicate stretched conditions. Operational metrics remain strong, with an 11% monthly gain, 23.6% operating margin, 17.9% profit margin, and a 2.09% dividend yield, prompting profit-taking rather than new buying.
Read at 24/7 Wall St.
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