Cisco (CSCO) is set to post second quarter results on Wednesday after markets close.
Wall Street expects the networking equipment giant to post EPS of $1.02, implying a rise of 8.5%, while revenue is expected to rise 8% to $15.21 billion during the quarter.
Cisco, which is a supplier to cloud, enterprise and communication services providers, benefitted from a robust cloud demand and rising AI- driven spending from organisations. The company, in November, reported fiscal first-quarter results that were above Wall Street’s estimates and raised its full-year forecast.
Seeking Alpha analysts and Wall Street are bullish and rated the stock a Buy. In contrast, Seeking Alpha’s Quant ratings consider it a Hold.
“While investors will debate if CSCO is cyclical or secular – our sense is there are plenty of tailwinds to ensure CSCO can sustain high single-digit sales and low-teens EPS growth on a multi-year basis, making it an attractive asset at under 20x P/E vs. large-cap tech peers,” said Evercore analyst Amit Daryanani.
Seeking Alpha analyst Rafa Oliver said Cisco is positioned for 6-7% annual growth, driven by AI infrastructure demand, campus networking upgrades, and expansion in network security post-Splunk acquisition. However, he added that margin pressure still exist for the company.
Over the last two years, Cisco has beaten both revenue and EPS estimates 100% of the time. Over the last three months, EPS estimates have seen 18 upward revisions, compared to no downward revisions. Revenue estimates have seen 17 upward revisions versus no downward move.
The stock has gained nearly 13% so far this year, compared to 1.7% rise in the broader S&P 500 Index.