Cisco Systems (CSCO), a major player in the communications equipment sector, wrapped up fiscal year 2025 with solid revenue figures. The highlight of their fourth quarter was strong demand for networking and security products, alongside a noticeable increase in orders related to AI infrastructure. Yet, in a surprising twist, CSCO shares dipped over 2% in after-hours trading.
Investment Strategy Insights:
- Consider exploring investment tools that can aid in your strategies.
For the fourth quarter, Cisco reported an 8% increase in revenues year-over-year, reaching $14.7 billion, which was higher than the market consensus estimate of $14.62 billion. The adjusted earnings per share (EPS) also saw a notable rise, climbing 14% from the previous year to $0.99, surpassing expectations of $0.98.
When we look at the full fiscal year, total revenue hit $56.7 billion, marking a 5% increase from fiscal 2024. The adjusted EPS rose slightly, by 2%, to $3.81.
Analyzing CSCO’s Q4 Performance
Cisco’s fourth quarter stood out in several areas. There was a 7% growth in product orders across all regions compared to the previous year. Notably, the company secured over $800 million in AI infrastructure orders during this quarter, culminating in annual totals that exceeded $2 billion, easily surpassing their initial target of $1 billion.
Additionally, the remaining performance obligation (RPO) grew to $43.5 billion, reflecting a 6% increase and signaling stronger demand. It’s estimated that around 50% of this RPO will be recognized as revenue in the upcoming 12 months.
Looking Ahead: Fiscal Q1 and 2026 Projections
For the first quarter of fiscal 2026, Cisco anticipates revenues between $14.65 billion and $14.85 billion, with adjusted EPS projected to be in the range of $0.97 to $0.99. The expected adjusted total margin is likely to fall between 67.5% and 68.5%.
Throughout fiscal year 2026, Cisco is forecasting revenues to sit between $59 billion and $60 billion, with adjusted EPS estimates being from $4.00 to $4.06.
It’s important to keep in mind that the EPS guidance reflects the implications of tariffs influenced by current trade policies.
Should You Consider Buying CSCO Stock?
Overall, the sentiment on Wall Street suggests a moderate buy rating for Cisco shares, supported by 10 buy recommendations and 9 holds. The average price target for CSCO stands at $73.33, hinting at about a 4.16% upside from current values. However, keep in mind that these estimates could shift following the release of the recent revenue numbers.
