Cisco’s Earnings Beat Lifts Shares – Analysts Make Upside & Downside Revisions

Cisco Systems welcomed a surge of enthusiasm as the stock price (NASDAQ: CSCO) witnessed a notable gap up before the market opened. From a previous close of $45.44, the stock opened at $48.75 before ending the day 6.8% up at at $48.53. This sharp increase came on the heels of an earnings report that comfortably surpassed Wall Street estimates, and the firm continues to pivot towards AI and Cybersecurity.

In the latest quarter, the network equipment provider posted earnings of $0.87 per share, edging out analyst predictions of $0.85. Revenue also exceeded expectations, reaching $13.64 billion against forecasts of $13.54 billion. Both mild beats on consensus, but beats nevertheless.

Cisco's leadership (CEO Chuck Robbins, and CFD Scott Herren) delivered bullish commentary on the release seeing a strong close to fiscal 2024. “Revenue, gross margin and EPS in Q4 were at the high end or above our guidance range, demonstrating our operating discipline,”, “As we look to build on our performance, we remain laser focused on growth and consistent execution as we invest to win in AI, cloud and cybersecurity, while maintaining capital returns.”

Analysts have been quick to adjust to the new look Cisco, with both upgrades and downgrades coming through. Some of the more notable raises include New Street upgrading CSCO stock from Neutral to Buy with a price target of $57. Deutsche Bank were another to raise (whilst keeping a Hold rating), as their respective price target shifted to $53 from the previous mark of $52.

Two firms to drop price targets were Jefferies, and Barclays. Whilst the latter remains Equal Weight, with a drop in PT to $49 from $50; Jefferies keep a bullish Buy rating on the stock, despite paring back the target from $56 to $53.

In other recent news that will shape the future of the company, Cisco announced a restructuring plan “to allow it to invest in key growth opportunities and drive more efficiencies in its business.” The firm expects that the restructuring will require it to recognize pre-tax charges of up to $1B through the 2025 fiscal year.

Cisco's better-than-expected earnings report has provided a positive jolt to its stock in recent trading sessions, but it is clear that the company navigates a competitive and ever-evolving industry landscape.