From Nasdaq: 2024-11-18 22:07:57

Cisco Systems Inc (NASDAQ: CSCO) saw a 0.8% growth to $59 on November 13th, while Alphabet stock (NASDAQ: GOOG) fell 1.5% to around $180. CSCO reported $13.8 billion in revenue for Q1, down 6% y-o-y, but its stock is up 17% ytd, driven by AI investments and product growth.

Cisco provided a stable outlook for Q2, with revenue projected between $13.75 billion and $13.95 billion. Full-year revenue forecast raised to $55.3 billion to $56.3 billion. GAAP EPS for Q1 was $0.68 and non-GAAP EPS was $0.91, surpassing earlier guidance, driven by gross margins and tax effects.

Cisco’s segment performance in Q1 showed mixed results, with security revenues doubling y-o-y, while networking revenues declined 23%. Product revenue decreased by 9%, while service revenue increased by 6%. Cisco’s financials varied regionally, with revenue in the Americas and EMEA declining, contrasting with APJC’s modest growth.

Cisco’s recent acquisition of Splunk demonstrates its commitment to expanding its security offerings. The move aligns with the company’s strategy to enhance AI-driven threat detection and response capabilities. Cisco aims to cross-sell Splunk products to drive revenue synergies, targeting about 5,000 existing Cisco customers who could become Splunk customers.

CSCO stock is trading at around 23x consensus earnings for FY’25, indicating a reasonable valuation. The company’s push into recurring revenue models and cybersecurity, through acquisitions, could benefit the stock. With a valuation of approximately $57 per share, Cisco is expected to outperform big tech peers in a potential economic downturn.



Read more at Nasdaq: What’s Happening With Cisco’s Stock?