Can Cisco’s Q3 Results Propel Its Stock Upward?

Published On: May 14, 2025 1:19 am

Cisco Earnings Preview: Growth Expected Amid Challenges

Note: Cisco’s FY 2024 ended July 27, 2024

Cisco Systems Inc (NASDAQ: CSCO), known for its networking equipment, security, collaboration, and cloud management solutions, is set to release its fiscal third-quarter earnings on Wednesday, May 14, 2025. Analysts anticipate earnings of 92 cents per share on revenue of $14.06 billion. This indicates a 5% increase in adjusted earnings year-over-year and an 11% rise in sales compared to last year’s figures of 88 cents per share and $12.7 billion in revenue. Historically, CSCO stock has tended to perform well after earnings announcements, rising 60% of the time, with a median one-day increase of 4.2% and a maximum spike of 7%.

Cisco is sensitive to global economic fluctuations due to its substantial institutional client base. Tariffs imposed on Canada, China, and Mexico could exert pressure on profitability. However, management has implemented measures to reduce their impact. Despite these uncertainties, Cisco maintains its market leadership and stands to benefit from growth in the Internet of Things (IoT). The company commands a current market capitalization of $238 billion. Over the past twelve months, Cisco generated $54 billion in revenue, reported $12 billion in operating profits, and net income of $9.2 billion.

Cisco’s Historical Odds of Positive Post-Earnings Return

Analyzing Cisco’s one-day (1D) post-earnings returns reveals interesting trends:

Over the past five years, Cisco has recorded 20 earnings data points, with 12 positive and 8 negative one-day returns, yielding a 60% occurrence of positive returns.
If we narrow the data to the last three years, the positive return percentage decreases slightly to 58%.
The median of the 12 positive returns stands at 4.2%, while the median of the 8 negative returns is -4.1%.

Additional data on the observed 5-Day (5D) and 21-Day (21D) returns following earnings is summarized in the table below.

Correlation Between 1D, 5D, and 21D Historical Returns

Traders may find a less risky strategy in understanding the correlation between short-term (1D) and medium-term returns (5D). For instance, if 1D and 5D returns show high correlation, traders might consider a “long” position in anticipation of continued positive movement for the next five days. Below are some correlation insights based on both five-year and three-year histories.

CSCO Correlation Between 1D, 5D and 21D Historical Returns

Is There Any Correlation With Peer Earnings?

Peer performance can influence the stock reaction post-earnings, with pre-announcement pricing often reflecting this dynamic. Below is a comparison of the past one-day (1D) post-earnings performance of Cisco Systems stock against peers that reported earnings shortly before Cisco.