Technology company Cisco Systems (CSCO) is set to release its Q1 FY25 results on November 13. Wall Street analysts anticipate that the company will report earnings of $0.87 per share, reflecting a 21.6% year-over-year decrease. Additionally, revenues are expected to drop by 6% from the same quarter last year, reaching $13.78 billion, according to data from the TipRanks Forecast page.
While analysts expect both revenues and earnings to decline compared to the previous year, it’s worth noting that Cisco has a strong history of beating estimates. It has surpassed consensus EPS projections in each of the last nine quarters.
Additionally, the company’s stock has risen about 15% this year, supported by favorable trends in the artificial intelligence (AI) sector.
Key Takeaways from TipRanks’ Bulls & Bears Tool
According to TipRanks’ Bulls Say, Bears Say tool pictured below, bullish analysts believe that Cisco is well positioned to benefit from the growing AI market, thanks to its strong product lineup and partnership with Meta Platforms (META). With a focus on AI-driven networks and enhanced cybersecurity, Cisco is set to grow in data center connectivity and security. Investor confidence is also high, with 33% of respondents planning to increase spending on Cisco in the next three years, signaling promising growth potential.
At the same time, bears continue to be wary of Cisco’s financial performance, with sales expected to drop due to tough comparisons and lower operating margins stemming from the Splunk acquisition. They also remain concerned about CSCO’s declining market share. Further, Cisco’s restructuring plan, affecting roughly 7% of its workforce, could result in pre-tax charges of up to $1 billion.
Options Traders Anticipate a 5.34% Move
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders are expecting a 5.34% move in either direction.
Is CSCO a Good Stock to Buy Now?
On TipRanks, CSCO is a Moderate Buy based on eight Buys, six Holds, and zero Sell ratings assigned by Wall Street analysts in the past three months. The average Cisco Systems stock price target is $58.08, implying a slight upside potential of 0.03% from the current levels.
