Here’s what Wall Street experts are saying about Cisco ahead of earnings

Cisco (CSCO) is scheduled to report results of its fiscal fourth quarter after the market closes on August 14 with a conference call scheduled for 4:30 pm ET. What to watch for:

Click here to check out Cisco’s recent Media Buzz Sentiment as measured by TipRanks.

GUIDANCE: Along with its last report, Cisco guided for Q4 adjusted earnings per share of 84c-86c on revenue of $13.4B-$13.6B. At the time, analysts were expecting the company to report Q4 EPS of 85c on revenue of $13.23B, but those estimates are now 85c and $13.54B, respectively. Meanwhile, Cisco in its last report narrowed its FY24 adjusted EPS view to $3.69-$3.71 from $3.68-$3.74 and raised its revenue view to $53.6B-$53.8B from $51.5B-$52.5B. Analysts expect the company to report FY24 EPS of $3.70 on revenue of $53.7B.

JOB CUTS: Cisco will cut thousands of jobs in a second round of layoffs this year as it shifts focus to higher-growth areas, including cybersecurity and artificial intelligence, Utkarsh Shetti and Supantha Mukherjee of Reuters reported last week, citing people familiar with the matter. The number of people affected could be similar to or slightly higher than the 4,000 employees Cisco laid off in February, and will likely be announced as early as Wednesday with the company’s Q4 results, sources told Reuters.

JPMORGAN: Late last week, JPMorgan raised the firm’s price target on Cisco to $55 from $53 and keeps a Neutral rating on the shares as part of a fiscal Q4 report. Cisco investors are hoping for early signs of a rebound in networking equipment demand to help deliver upside as well as stronger than expected revenue guidance, the analyst tells investors in a research note. However, the firm says it is yet to see material signs of a recovery in customer demand and yet to see material acceleration in Security growth, which is pivotal to the company’s long-term revenue growth guide.

ROSENBLATT: Following the company’s investor day in June, Rosenblatt noted that Cisco did not change financial guidance for Q4, the current quarter, and FY25 as it hosted an Investor Day at its Cisco Live customer event in Las Vegas. For FY26 and FY27, Cisco is targeting 4%-6% annual revenue growth and 6%-8% EPS growth, added the analyst. While the firm continues to have a Neutral rating on Cisco and calls the investor day “largely just inline,” it sees “a tactical opportunity for a near-term long trade in the name” given the view that it looks like the Enterprise Networking industry is now moving past inventory correction issues and product orders are improving against easy comps, the analyst told investors.

JEFFERIES: Meanwhile, Jefferies analyst George Notter came away from the Cisco analyst day “feeling incrementally better about the business” and with more clarity on their strategy with Splunk. The company reiterated prior guidance for FY25 and now expects 4%-6% revenue growth in FY26 and FY27 with operating margin expansion and 6%-8% EPS growth, which the firm calls “reasonably good guidance.” Jefferies maintained a Buy rating and $56 price target on Cisco shares following the event.

AI INVESTMENT FUND: In early June, Cisco Investments, the global corporate venture investment arm of Cisco, announced its launch of a $1B AI investment fund to bolster the startup ecosystem and expand the development of secure and reliable AI solutions. “As part of the new AI fund, Cisco is making strategic investments in Cohere, Mistral AI and Scale AI among others to advance customers’ AI readiness and complement Cisco’s AI innovation strategy. Cisco has already committed nearly $200M of the $1B investment fund to date,” Cisco stated.

Around the same time, Cisco announced what it says is “a breakthrough AI cluster solution” with Nvidia (NVDA) for the data center that “transforms how customers build, manage and optimize infrastructure and software.” The company stated: “Cisco is bringing to market a new enterprise-ready, end-to-end infrastructure solution to scale generative AI workloads. The Cisco Nexus HyperFabric AI cluster solution combines Cisco AI-native networking with NVIDIA accelerated computing and AI software, and a robust VAST data store. It is designed to enable customers to focus on AI-driven innovation and new revenue opportunities rather than IT management.” Select customers may have early trial access to this AI solution in Q4 of CY 2024, with general availability expected shortly thereafter, Cisco added.