Should You Buy Cisco Systems, Inc. Ahead of its Quarterly Report?

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Should You Buy Cisco Systems, Inc. Ahead of its Quarterly Report?

Should You Buy Cisco Systems, Inc. (NASDAQ:CSCO) Ahead of its Quarterly Report?

Cisco Systems, Inc. (CSCO) Information Technology – Communications Equipment | Reports August 17, After Market Closes

Key Takeaways

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Jeffrey Aronson Crossroads CapitalAt this year's Sohn Investment Conference, Dan Sundheim, the founder and CIO of D1 Capital Partners, spoke with John Collison, the co-founder of Stripe. Q1 2021 hedge fund letters, conferences and more D1 manages $20 billion. Of this, $10 billion is invested in fast-growing private businesses such as Stripe. Stripe is currently valued at around Read More


  • The Estimize consensus is looking for earnings per share of 61 cents on $12.52 billion in revenue, 1 cent higher than Wall Street on the bottom line and right in line on the top
  • Core switching and routing services have underperformed in recent quarters which has resulted in Cisco’s shift in focus to security, data centers and mobile
  • Having its hand in so many businesses exposes Cisco to competition from all ends, from big tech giants to smaller startups
  • What are you expecting for CSCO? Get your estimate in here!

Results for Cisco’s fiscal fourth quarter are scheduled to be announced this Wednesday, after the market closes. The networking giant is coming off a better than expected third quarter that beat the Wall Street consensus by 2 cents on the bottom and almost $100 million on the top. Improving markets for its products on top of solid growth in areas like cloud computing and security should continue to boost earnings moving forward.

The Estimize consensus is looking for earnings per share of 61 cents, 3% higher than the same period last year. That estimate has climbed 6% since Cisco’s most recent report in May. Revenue is expected to increase by 2% to $12.52 billion in revenue, slightly higher than Wall Street’s sales target. Shares are up 10% in the past 12 months and typically jump an additional 1% after a report. Cisco continues to have its hand in many different markets. Its core business remains its switching and routing services which account for 45% of total revenue. The real problem is that these products are offering very little growth. As a result, Cisco is shifting its focus towards high growth areas such as cloud security, data centers and mobile. Cisco is one of the dominate players in the security space with a market share of over 15%. Revenue from this segment rose 5.4% during the fiscal third quarter. Data center and mobile is performing just as well and will continue to be a part of the company’s long term strategy.

Being involved in a variety of businesses exposes Cisco to multiple competitors. In the security sector, its peers include Check Point, Palo Alto Networks and Fortinet. From a data center front they compete with Microsoft and HP.
Do you think CSCO can beat estimates? There is still time to get your estimate in here!

Photo Credit: Romain DECKER

 

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