Cisco Systems Shines Bright: Strong Performance and Positive Analyst Outlook
San Jose, California-based Cisco Systems, Inc. (CSCO) is a leader in the design, manufacturing, and sale of Internet Protocol-based networking products and other services within the communications and information technology sectors. The company boasts a market capitalization of $248 billion and provides a diverse range of services, including enterprise network security, software development, data collaboration, and cloud computing.
Cisco’s Stock Outpaces the Market
Over the last year, Cisco’s stock has clearly outperformed the broader market. CSCO shares have increased by 25.1%, while the S&P 500 Index ($SPX) has risen by about 20.6%. This trend has continued into 2025, where CSCO’s stock is up 5.2%, outdoing the SPX’s 2.5% gain year-to-date (YTD).
However, when comparing CSCO’s gains to the iShares U.S. Telecommunications ETF (IYZ), the outperformance appears less significant. The ETF has surged roughly 23.7% over the past year, while CSCO’s YTD growth surpasses the ETF’s more modest 4.1% returns.
Strategic Shifts and Growth Drivers
The rise in Cisco’s stock can largely be attributed to its transition toward a subscription-based business model, which now generates over half of its total revenue. This change provides more stable and predictable income for investors. Furthermore, Cisco’s recent acquisition of Splunk has expanded its software lineup, positioning it as a significant contender in the software market. Also noteworthy is the launch of the AI-powered Hypershield, which enhances Cisco’s security solutions.
Recent Financial Performance
On November 13, Cisco reported its Q1 results, showing a slight increase in share price. The adjusted earnings per share (EPS) of $0.91 exceeded Wall Street’s expectations of $0.87, while revenue reached $13.84 billion, surpassing forecasts of $13.76 billion. For the full fiscal year, Cisco projects adjusted EPS between $3.60 and $3.66, with anticipated revenue ranging from $55.3 billion to $56.3 billion.
Analysts’ Expectations and Ratings
Looking ahead to the current fiscal year, which ends in July, analysts predict a 4.8% decline in Cisco’s EPS, bringing it down to $2.97 on a diluted basis. Notably, Cisco has a strong track record, having beaten earnings estimates for the past four quarters in a row.
Among the 21 analysts covering CSCO, the consensus rating is a “Moderate Buy,” comprised of nine “Strong Buy” ratings, two “Moderate Buys,” and ten “Holds.” This outlook is an improvement from last month, where only eight analysts recommended a “Strong Buy.”
Notably, on January 31, Exane BNP Paribas upgraded Cisco to an “Outperform” rating, setting a price target of $72, which indicates a potential upside of 15.6% from current levels. The mean price target stands at $64.68, reflecting a 3.9% premium over the current price, while the highest target of $78 suggests an upside potential of 25.3%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
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