Cisco Systems Stock Outlook: Is Wall Street Bullish or Bearish?

San Jose, California-based Cisco Systems, Inc. (CSCO) is an IP-based networking company offering products and services to service providers, companies, commercial users, and individuals. With a market cap of $221.8 billion, Cisco’s operations span the Americas, Indo-Pacific, Europe, the Middle East, and Africa.

CSCO stock has underperformed the broader market over the past year. The stock has gained 8.4% on a YTD basis, lagging behind the S&P 500 Index’s ($SPX) 19.6% gains in 2024. Over the past 52 weeks, CSCO is up 6.2% compared to the SPX’s 36.9% returns during the same time frame.

Narrowing the focus, Cisco has also underperformed the Technology Select Sector SPDR Fund’s (XLK) 15.5% gains on a YTD basis and 36.5% returns over the past 52 weeks.

www.barchart.com

Cisco has hit some bumps lately as the shift to cloud-based solutions put pressure on its core networking segment, including switches and routers. With big enterprises veering towards the cloud, demand for traditional networking gear has softened.

Still, CSCO spiked 6.8% after its fiscal 2024 earnings report on Aug. 14 and rode a positive wave for the next four days. Despite reporting a 5.6% dip in annual revenue to $53.8 billion, weighed down by slower product sales, its Q4 numbers told a brighter story. Total revenue of $13.6 billion beat forecasts by 90 basis points, while with adjusted EPS at $0.71, it topped analyst expectations by 1.4%.

For the current fiscal year, ending in July 2025, analysts expect Cisco Systems’ adjusted EPS to drop 7.4% year-over-year to $2.89. The company has a robust earnings surprise history. It has surpassed Wall Street’s earnings estimates in each of the past four quarters.

Among the 21 analysts covering the stock, the consensus rating is a “Moderate Buy,” of which six recommend “Strong Buy,” two advise “Moderate Buy,” and 13 suggest a “Hold” rating.

www.barchart.com

This configuration has been mostly stable over the past months.

On Oct. 16, Citigroup (C) analyst Atif Malik upgraded Cisco’s rating from a “Neutral” to a “Buy” and raised the price target to $62. As per Malik, Cisco has significant potential in the burgeoning field of ethernet-based AI. Cisco’s pre-existing ethernet switches, which have been used previously to facilitate traditional computer networks, could also help to connect graphics processing units used in AI applications to other hardware. Malik views a potential rotation away from semiconductors and toward AI networking services as another likely benefit for Cisco.

While CSCO’s mean price target of $56.53 represents a 3.2% premium to current price levels, the Street-high target of $78 suggests a potential upside of 42.4%.

More Stock Market News from Barchart

• Stocks Jump on Solid Amazon Earnings and Dovish US Payroll Report
• Bold Speculators Have a 355% Payout Opportunity in AMC Stock Next Week
• 1 Top Growth Stock to Buy and Hold for Long-Term Upside
• What Did the October Close of the S&P 500 Mean?

On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.