Morgan Stanley has reiterated its bullish stance on Cisco Systems (CSCO), maintaining a Buy rating ahead of the company’s upcoming earnings report on May 14. With investors eyeing signs of recovery in enterprise spending and Cisco’s push into AI-driven networking, Wall Street is watching closely to see if the tech giant can deliver.
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Morgan Stanley Stays Bullish on CSCO Stock
Four-star-rated analyst Meta Marshall at Morgan Stanley expects the company to slightly beat revenue estimates and post stronger-than-expected profit margins in the upcoming quarter. This optimism is based on solid enterprise spending data and limited impact from tariffs, thanks to exemptions and compliance with the USMCA (United States-Mexico-Canada Agreement) trade agreement. Marshall predicts around 9% growth in CSCO stock from current levels.
Overall, analysts expect Cisco will report earnings of $0.92 per share for Q3 FY25, up from $0.88 a year earlier.
Key Metrics for Cisco in FY25
Let’s examine some key metrics for Cisco from previous quarters and their implications for investors.
According to Main Street Data, Cisco reported $41 billion in Remaining Performance Obligations (RPO) in the previous quarter, marking a year-over-year growth of over 17%. In simple terms, RPO represents the future revenue Cisco expects to earn from existing contracts that are yet to be fully delivered. For investors, this signals a strong revenue pipeline and long-term business visibility in the company’s growth outlook.
Meanwhile, Cisco’s annual recurring revenue (ARR) reached $29.6 billion, marking a 22% year-over-year increase. This growth highlights Cisco’s successful shift toward a subscription-based model, with a strong focus on software and services. For investors, this trend indicates a stable and predictable revenue stream for Cisco.
Is Cisco Stock a Good Buy Now?
According to TipRanks, CSCO stock has received a Strong Buy consensus rating, with 10 Buys and seven Holds assigned in the last three months. The average Cisco share price target is $68.33, suggesting a potential upside of 14.32% from the current level.
