What Can We Expect From Cisco’s Next Earnings Report?

In spite of trade war concerns, analysts are bullish when it comes to Cisco.

Cisco is releasing its fiscal fourth-quarter earnings report this week after being dogged by trade war concerns and the recent revenue guidance warning from NetApp. But in spite of these headwinds, many analysts are bullish on the company’s outlook. 

Here is an overview of what Wall Street is expecting to see from Cisco on Wednesday:

  • Revenue: Analysts are expecting the company’s revenue to reach $13.4 billion.
  • Earnings: Analysts are looking for the company to report earnings of 82 cents per share.
  • Stock: Analysts are optimistic when it comes to Cisco. Of the 27 analysts surveyed, 17 have buy or overweight ratings and 10 have hold ratings. The average price target is $58.68.

What to expect from the earnings report

Cisco stock has grown at a steady pace over the years. The company’s shares are up 22% year to date and analysts expect this will continue.  

JP Morgan analyst Samik Chatterjee maintained his overweight rating and $62 price target on Cisco stock. Chatterjee acknowledged that the company is trading below its 52-week high but said he thinks investor concerns are overblown. 

Analysts at Wells Fargo, Piper Jaffray’s, and USB are also bullish when it comes to Cisco. This enthusiasm is largely due to the positive changes the company experienced under CEO Chuck Robbins. 

In the past, Cisco focused primarily on selling networking hardware. In his four years at Cisco, Robbins transformed the company and diversified its product and services portfolio. Robbins did this by focusing on acquiring companies and consolidating their operations. The company now offers both hybrid and recurring software subscriptions.  

Final thoughts

Cisco has experienced strong growth over the past few years and so it’s only natural to wonder how long it will last. And the trade war tensions between the U.S. and China don’t seem to be easing up like many people thought they would.

But according to Cisco’s CFO Kelly Kramer, Cisco doesn’t have significant business operations in China. Roughly 3% of the company’s revenue comes from China so the trade war shouldn’t affect Cisco in a significant way. 

If the company can continue to diversify its business and create predictable revenue streams, this momentum will likely continue.