From Nasdaq: 2024-09-17 11:22:00

Cisco Systems (CSCO) shares have returned 11% in the past three months, outperforming the Zacks Computer & Technology sector. Revenues for fiscal 2025 are expected between $55 billion and $56.2 billion. The Zacks Consensus Estimate for fiscal 2025 revenues is $55.61 billion, showing 3.36% growth. However, the earnings outlook is disappointing.

The increase in AI-related workload presents a strong long-term opportunity for Cisco, with the total growth opportunity expected to be $950 billion. Cisco’s aggressive investments in AI, cloud, and cybersecurity are driving growth. The security segment, with solutions like XDR and Multicloud Defense suites, is particularly noteworthy.

Cisco’s expanding partner base, including key players like Microsoft, NVIDIA, Lenovo, and AT&T, is driving its prospects. Collaborations with NVIDIA and AT&T for innovative solutions are enhancing Cisco’s position in the market. However, analysis suggests that Cisco’s stock may be overvalued at the moment, with a stretched valuation.

Despite a stretched valuation, Cisco’s expanding portfolio, strong partner base, and growing footprint in the cybersecurity domain are key catalysts for growth. A strong liquidity position is expected to maintain dividends and share repurchase. With a Zacks Rank #3 (Hold), investors should wait for a better entry point into the stock. Cisco returned $3.6 billion to shareholders in fiscal 2024.



Read more at Nasdaq: Cisco Rises 11% in 3 Months: Buy, Sell or Hold the CSCO Stock?