In the following video, senior technology analyst Eric Bleeker looks at�Cisco's (NASDAQ: CSCO ) valuation. As Eric notes, a key reason investors look at Cisco is that it's cheap, trading at roughly 12 times earnings.�
Yet the entire technology space is rife with companies in deep-value territory.�Dell�was bought out for around 10 times earnings, while�Hewlett-Packard� (NYSE: HPQ ) has recently traded below four times its trailing free cash flow -- a stunningly cheap multiple.�
Looking out even further, we can see�Intel and�Apple�in the broader�technology�sphere trading at around 10 times earnings. That is to say, when looking at valuation, a company must always be compared against its industry peers, and Cisco's peers are cheap as well.�
Yet IBM� (NYSE: IBM ) has recently fetched a higher multiple than other big tech plays. Eric believes that the breadth of IBM's portfolio gives investors a feeling of more certainty in a tech landscape that looks quite uncertain in the next five years.�
Looking at Cisco, Eric notes that if the company is able to continue growing its services business at rates beyond the company average, it could give Cisco a similar storyline of added safety though multiple revenue streams and finally nudge its multiple forward. To see Eric's full thoughts, watch the video.
Once a high-flying tech darling, Cisco is now on the radar of value-oriented dividend lovers. Get the lowdown on the routing juggernaut in The Motley Fool's�premium report. Our report also has you covered with a full year of free analyst updates to keep you informed as its story changes, so click here now to read more.
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