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Cisco Systems, Inc. (CSCO) delivered 16% YoY lower free cash flow in its latest quarter, and its FCF margin fell from 24.9% to 19.4%. Its price target is still 6% higher than today's price, but has CSCO peaked here? One way to play it is to sell short out-of-the-money (OTM) put options in nearby expiry periods.
CSCO is trading at $78.28, a recent peak, up from its pre-earnings low on Nov. 6 of $71.06. My analysis shows that the stock could be worth just 6.7% more over the next 12 months (NTM), or $83.49 per share.
