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Cisco’s Q4 Results Impress Investors, Sending Shares 4.9% Higher

Story Highlights

After Cisco reported its Fiscal Q4-2022 earnings results and future outlook, shares rallied close to 5%, as earnings beat analysts’ expectations. Analysts and top retail investors on TipRanks are bullish on CSCO stock, making it worth considering.

Tech giant Cisco (CSCO) recently released its Fiscal Q4-2022 and full-year earnings results in today’s after market close. Both earnings per share (EPS) and revenue beat analysts’ expectations. The company also provided its financial outlook, which beat expectations in terms of revenue but missed on EPS. The stock is up 4.9% currently in the after-hours session.

In its Fiscal Q4, which ended on July 30, Cisco’s non-GAAP earnings came in at $0.83 per share, decreasing 1% year-over-year but beating estimates calling for $0.82. Also, revenue came in at $13.1 billion (flat compared to last year), higher than the consensus estimate of $12.78 billion.

However, Cisco’s non-GAAP gross margin dropped by 230 basis points in its most recent quarter, going from 65.6% to 63.3%. Also, cash flow from operations dropped 18% year-over-year, to $3.7 billion. For the full year, revenue was 3% higher, reaching $51.6 billion.

Regarding its Fiscal 2023 outlook, CSCO looks to generate $3.49 to $3.56 in adjusted earnings per share compared to $3.36 in Fiscal 2022, and it expects revenue growth of 4% to 6%. For Fiscal Q1 2023, CSCO expects revenue to grow by 2% to 4% and for adjusted EPS to come in at $0.82 to $0.84. That’s a mixed outlook for analysts, as they were expecting Fiscal Q1 EPS guidance of $0.84, with revenue declining about 0.2%.

What is CSCO Stock’s Price Target?

Turning to Wall Street, CSCO earns a Moderate Buy consensus rating based on seven Buys, 12 Holds, and one Sell rating assigned in the past three months. The average CSCO price target of $51.47 implies 10.3% upside potential.

Top Retail Investors are Very Bullish on CSCO Stock

TipRanks currently tracks 555,041 investor portfolios that use the Smart Portfolio tool. The top investors, which amount to 110,008 portfolios, appear highly bullish on CSCO stock.

In the past 30 days, the number of top-performing TipRanks portfolios holding CSCO stock increased by 6.5%, leading to 2.6% of portfolios holding the stock. In the past seven days, this number increased by 0.9%. Cisco has very positive investor sentiment, above the sector average, as shown in the image below:

Conclusion: Cisco’s Q4 Earnings Report Was Solid

Cisco’s earnings results were solid, as they beat both revenue and EPS expectations. In addition, the company’s forward guidance is not too far off from what analysts were expecting, and adjusted EPS is expected to grow by 3.9% to 6% in the next year, which is respectable for a mature company like CSCO. As a result, the stock is rallying in after-hours trading and is worth considering.  

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