Cisco earnings: What to anticipate from the community gear and software program big

Raymond James analyst Simon Leopold, who has an outperform and a $64 goal, mentioned his channel checks help Cisco that forecast, and expects year-over-year development seemingly within the second half of fiscal 2024.

“In addition to better orders, we are optimistic that an easing supply chain will enable Cisco to convert its outsized backlog, while [annual recurring revenue] growth should improve with attached software sales,” Leopold mentioned. ARR is a metric usually utilized by software-as-a-service firms to point out how a lot income the corporate can anticipate based mostly on subscriptions.

“Investor sentiment remains mixed with increased interest related to AI optimism as well as the improved 2nd derivative on orders vs. expectations for share loss and sales declines,” Leopold famous.

KeyBanc analyst Thomas Blakey, who has a sector weight ranking on Cisco, expects in-line outcomes from the corporate on condition that enterprise order have lagged currently, and mentioned he’ll be in search of colour on a difficulty that has plagued tech firms since final yr: stock drawdowns.

“In our view, management commentary on order rate improvement as well as additional color on backlog drawdown will be important to lookout for post peer reports highlighting increased drawdown and order rate softness from certain verticals,” Blakey mentioned.

Citi Research Atif Malik on Friday opened a “positive catalyst watch” on Cisco, whereas viewing the inventory as a “mixed bag,” anticipating the corporate to outperform friends Arista Networks Inc.
ANET,
-0.77%
and Juniper
JNPR,
-0.61%
as “strong enterprise demand likely fuels upside” to the July ending quarter outcomes.

“While we like its growing software and diversified sales mix, we see this as offset by market share challenges in switch/security end markets and lower relative cloud exposure,” Malik mentioned. The analyst at the moment has a impartial ranking on the inventory.

Analysts surveyed by FactSet anticipate fourth-quarter earnings of $1.06 a share on income of $15.05 billion, a 14.9% achieve from a yr in the past.

Of the 27 analysts who cowl Cisco, 11 have buy-grade scores, 15 have maintain scores, and one has a promote ranking, together with a median goal worth of $55.84.

Year so far, Cisco shares are up 12.9%, in contrast with a 6.4% rise for the Dow Jones Industrial Average
DJIA,
of which Cisco is a part. Results evaluate to a 16.3% achieve on the S&P 500 index
SPX,
and a 30.4% rally for the tech-heavy Nasdaq Composite
COMP.