Technology company Cisco Systems CSCO will report its first-quarter financial results after the market closes on Wednesday. The company looks to continue a streak of consecutive revenue and earnings per share beats.
Earnings Estimates: Analysts expect Cisco to report first-quarter revenue of $13.77 billion, down from $14.67 billion in last year's first quarter, according to data from Benzinga Pro.
The company has beaten analyst estimates for revenue in nine straight quarters.
Analysts expect the company to report first-quarter earnings per share of 87 cents, down from $1.11 per share in last year's first quarter. Cisco has beaten analyst estimates for earnings per share in more than 10 straight quarters.
The company’s guidance calls for first-quarter revenue between $13.65 billion and $13.85 billion. Cisco also guided for earnings per share between 86 cents and 88 cents.
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What Analysts Are Saying: Concerns over company spending in the second half of 2024 could hurt Cisco Systems for the first fiscal quarter, Piper Sandler analyst James E. Fish cautioned in a new investor note.
"Estimates are slightly too high for most of our universe," Fish said.
The analyst has a Neutral rating on Cisco with a $52 price target.
Cisco could beat first quarter estimates with a "relatively easy setup," Fish said.
"Investor debate being if this is the next large-cap breakout with the AI cycle."
While the analyst said Cisco could beat first-quarter estimates and sees strong order expectations going forward, the stock trades at the high end of its historical range for an enterprise value divided by free cash flow metric.
JPMorgan analyst Samik Chatterjee sees "further headroom for upside" for Cisco stock going forward.
The analyst recently upgraded the stock from Neutral to Overweight and raised the price target from $55 to $66.
The analyst said recent earnings reports from Cisco peers showed strong customer demand and activity for a networking recovery.
“Importantly, Cisco being the bellwether of the Networking market should not only benefit from the improving demand signs in the underlying market, but also benefit from better leverage on the recovery given recent workforce reductions through the course of 2024 (~10k employees in total), driving our conviction for the company being well-positioned to drive earnings upside over the next twelve months,” Chatterjee said.
Key Items to Watch: A recovery of networking will be a key for investors and analysts to watch as Cisco has reported revenue declines in recent quarters.
Another key item to watch will be recurring revenue, thanks to growing subscription revenue. The company reported annualized recurring revenue of $29.6 billion in the fourth quarter, up 22% year over year.
"We delivered a strong close to fiscal 2024. In our fourth quarter, we saw steady customer demand with order growth across the business as customers rely on Cisco to connect and protect all aspects of their organizations in the era of AI," Cisco CEO Chuck Robbins said after fourth-quarter results.
The company said it was investing to win in artificial intelligence, cloud and cybersecurity. Investors and analysts will be looking for updates on the company's revenue growth in several sub-sectors and how positive the commentary is for the future.
CSCO Price Action: Cisco stock was down 0.2% Tuesday at $58.51 versus a 52-week trading range of $44.50 to $59.38. Cisco stock is up 16.1% year-to-date in 2024.
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