Cisco Systems Inc Q3 Earnings Show Modest Gains Amid Light Options Activity

Cisco Systems Inc (CSCO) reported Q3 results with revenue up 11% YoY, non-GAAP net income of $3.8 billion, and non-GAAP earnings per share of $0.96. Networking revenue was up 8%, security revenue increased 54%, and collaboration revenue rose 4%. Total ARR was $30.6 billion, up 5%, and total subscription revenue was $7.9 billion, up 15%. The stock price increased by $0.34 or 0.49% to $68.39, with options trading relatively light.

Cisco Systems Inc. (CSCO) reported robust third-quarter (Q3) results, with revenue up 11% year-over-year (YoY) to $14.1 billion. The company's non-GAAP net income reached $3.8 billion, and non-GAAP earnings per share (EPS) stood at $0.96. Networking revenue grew by 8%, security revenue surged by 54%, and collaboration revenue rose by 4%. Total annual recurring revenue (ARR) reached $30.6 billion, up 5%, while total subscription revenue climbed to $7.9 billion, representing a 15% increase [1].

The stock price of Cisco Systems Inc. (CSCO) saw a modest increase of $0.34 or 0.49%, reaching approximately $68.39. Options trading was relatively light, with 46,000 contracts exchanged, and the put/call ratio was 0.36, indicating a slightly bullish sentiment in the market [1]. The stock's implied volatility (IV30) saw a slight rise of 0.4 points, reaching 27.18, which is above the 52-week median.

Wall Street analysts have provided an average target price of $71.56 for Cisco Systems Inc. (CSCO) over the next year, with a high estimate of $80.00 and a low estimate of $59.22. This average target implies an upside of 4.71% from the current stock price of $68.34. The average brokerage recommendation is 2.1, indicating an "Outperform" status [1].

GuruFocus estimates the fair value (GF Value) for Cisco Systems Inc. (CSCO) to be $56.77 in one year, suggesting a downside of 16.93% from the current stock price. This GF Value is calculated based on historical multiples and future business performance estimates [1].

Cisco Systems Inc. (CSCO) continues to invest in AI infrastructure, with AI infrastructure orders from web-scale customers exceeding $600 million in Q3, bringing the year-to-date total to over $1 billion. The company's strategic acquisitions and partnerships, such as the $1 billion global AI investment fund and collaborations with NVIDIA and HUMAIN, position it as a key player in the AI infrastructure market [2].

Despite strong performance, Cisco Systems Inc. (CSCO) faces uncertainties related to tariffs, macroeconomic conditions, and competitive pressures in the AI and networking markets. The company's ability to capitalize on the AI infrastructure opportunity will depend on its execution and market adaptability.

References:
[1] https://www.gurufocus.com/news/2991587/cisco-csco-shows-modest-gains-amid-light-options-activity-csco-stock-news
[2] https://www.ainvest.com/news/cisco-systems-csco-undervalued-backbone-ai-infrastructure-2507/