Cisco Systems (CSCO) stock traded lower Thursday even after the networking equipment specialist's beat-and-raise quarter.
In the three months ended April 27, Cisco's revenue decreased 13% year-over-year to $12.7 billion and its earnings per share (EPS) slumped 12% to 88 cents. The company closed its acquisition of Splunk during the quarter, helping its total annualized recurring revenue increase 22% year-over-year to $29.2 billion.
"We delivered a solid Q3 performance in what remains a dynamic environment," said Cisco CEO Chuck Robbins in the press release. "Our unique ability to bring together networking, security, observability, and data enables Cisco to offer our customers unrivaled digital resilience for the [artificial intelligence] AI era."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The company's results easily beat analysts' expectations. According to CNBC, Wall Street was anticipating revenue of $12.5 billion and earnings of 82 cents per share.
As a result of its better-than-expected fiscal third-quarter results, Cisco increased its revenue guidance for the fiscal year. It now expects revenue in the range of $53.6 billion to $53.8 billion, up from its previous range of $51.5 billion to $52.5 billion.
It also narrowed its earnings forecast for the full year, now anticipating earnings in the range of $3.69 to $3.71 per share, compared with its prior estimate for earnings of $3.68 to $3.74 per share.
Cisco's new outlook satisfied analysts' expectations. According to Yahoo Finance, Wall Street expects Cisco to report fiscal 2024 revenue of $53.1 billion and EPS of $3.67.
Lastly, Cisco declared a quarterly dividend of 40 cents per share, payable on July 24 to shareholders of record at the close of business on July 5. CSCO is one of the best dividend stocks on Wall Street, having raised its annual payout 12 years in row. Most recently, the company hiked its quarterly dividend by 3% in February.
Is Cisco stock a buy, sell or hold?
Although Cisco Systems is one of the Dow Jones stocks that is lower on a year-to-date basis, analysts are still very bullish on it. According to S&P Global Market Intelligence, the consensus analyst target price for CSCO stock is $54.07, representing implied upside of roughly 12% to current levels. Meanwhile, the consensus recommendation is Buy.
Financial services firm Oppenheimer is one of those bullish outlook toward Cisco, as evidenced by its Outperform (Buy) rating on the blue chip stock. Additionally, it has an above-consensus price target of $58, representing implied upside of about 20% to current levels.
Despite inventory issues that will likely pressure networking revenue through the end of this calendar year, the company's fiscal third-quarter results were "solid" and provided "early indications of a bottom in networking demand," Oppenheimer analyst Ittai Kidron wrote in a May 15 report.
"In addition, the company identified multiple tailwinds that can drive a reacceleration in growth for fiscal 2025," Kidron said, including AI and Splunk. "Still, the company will need to execute on its initiatives, and many of the benefits will take time to flow through."
Related Content
-
Visa Is the Worst Dow Stock Wednesday. Here's WhyVisa stock is down sharply Wednesday after the credit card company came up short of revenue expectations for its fiscal Q3.
-
Another Analyst Moves to the Sidelines on Tesla Stock After EarningsTesla stock is spiraling Wednesday after the EV maker's big earnings miss and Wall Street has been quick to weigh in. Here's what you need to know.
-
Visa Is the Worst Dow Stock Wednesday. Here's Why
Visa stock is down sharply Wednesday after the credit card company came up short of revenue expectations for its fiscal Q3.
-
Tesla Stock: Another Analyst Moves to the Sidelines After Earnings
Tesla stock is spiraling Wednesday after the EV maker's big earnings miss and Wall Street has been quick to weigh in. Here's what you need to know.
-
Alphabet Stock Falls as Q2 Ad Revenue Growth SlowsAlphabet stock is trading lower Wednesday as slowing ad sales growth offsets a Q2 earnings beat. Here's what you need to know.
-
Stock Market Today: Stocks Tumble on Disappointing Big Tech EarningsPoorly received quarterly results from Alphabet and Tesla sparked a steep selloff in equities.
-
Is GE Stock Still a Buy After Big Earnings Beat?GE stock is higher Tuesday after the industrial giant's beat-and-raise quarter, but what do analysts think? We take a closer look here.
-
UPS Stock Heads Toward Worst Day Ever After EarningsUPS stock is down big after coming up short of analysts’ expectations for its second quarter and cutting its outlook. Here’s what you need to know.
-
Spotify Stock Surges After Q2 Earnings Beat: What to KnowSpotify stock is flying higher Tuesday after the streaming giant reported its second-quarter earnings results. Here's what you need to know.
-
Stock Market Today: Mega-Cap Tech Rallies to Drag Markets HigherMarkets focused on upcoming earnings from Magnificent 7 stocks rather than chaos in D.C.
