Cisco Systems to Report Earnings: Analysts Expect $0.84 EPS

Cisco Systems Inc. is scheduled to report its earnings after Thursday’s market close, with analysts expecting the company to announce earnings of $0.84 per share on revenue of $12.71 billion. This earnings report is particularly significant for Cisco, as its stock has a history of experiencing significant price movements following such announcements. If Cisco’s earnings surpass expectations, the stock could see a sharp increase, known as a gap-up, in its price. Conversely, if the earnings disappoint, the stock could gap down. Currently trading around $50, Cisco’s stock reached a record high of $82 per share in 2000.

From a fundamental perspective, Cisco Systems presents an interesting proposition. The company has a relatively low price-to-earnings (P/E) ratio of 12, which is below that of many other technology stocks. Over the past three quarters, Cisco has demonstrated impressive earnings growth, posting double-digit increases year-over-year. Additionally, revenue has seen double-digit growth in two of the last three quarters. Looking ahead, analysts are optimistic about Cisco’s growth prospects, with expectations for earnings to reach $3.79 per share in 2025, representing a 2% increase from the estimated $3.71 per share in 2024. Cisco’s return on equity (ROE) is also noteworthy, standing at a high 38%.

Despite these strong fundamentals, Cisco’s stock has recently underperformed compared to major indices and its peers. Bulls in the market are hopeful that a positive earnings report could lead to a gap-up in the stock price, potentially pushing it above $52 per share. Such a move would not only establish a new near-term high but also bring the stock back above both its 50 and 200-day moving average (DMA) lines.

In terms of its business focus, Cisco Systems is expanding its presence in the network security domain. The company offers products and services aimed at preventing unauthorized access, protecting against malware, and ensuring data center security. Notably, Cisco has introduced the Secure Remote Worker solution, which leverages a Zero Trust Architecture along with its robust endpoint security portfolio. Additionally, the company provides Next-Generation Network (NGN) Routers, facilitating the transport of data, voice, and video information across IP networks.

As investors await Cisco’s earnings report, the market’s reaction to the news will be closely watched. During earnings season, it’s crucial for investors to manage risk by keeping losses small and aligning their strategies with prevailing market trends. Cisco’s strong fundamentals and its strategic focus on network security position the company as a compelling option for investors seeking growth opportunities in the technology sector.