Cisco Systems Rises 16% in a Year: Buy, Sell or Hold the Stock?

Cisco Systems CSCO shares have surged 16% in the trailing 12 months, underperforming the Zacks Computer & Technology sector’s appreciation of 30.7% and the Zacks Computer – Networking industry’s return of 15.3%.Cisco’s expanding footprint across diverse sectors, including cybersecurity, AI infrastructure, cloud solutions, and enterprise networking, is driving its growth and boosting its share performance.CSCO’s strategic partnerships with industry leaders have significantly enhanced its market presence. Its robust portfolio, along with a strong partner ecosystem has been a key catalyst.Furthermore, advancements in cybersecurity, with offerings like XDR and Secure Access, have strengthened Cisco’s position in the market.One-Year PerformanceImage Source: Zacks Investment ResearchThe stock is currently trading above the 50-day and 200-day moving averages, indicating a bullish trend.CSCO Stock Trades Above the 50-Day and 200-Day SMAImage Source: Zacks Investment ResearchHowever, CSCO stock is not so cheap, as its Value Score of C suggests a stretched valuation at this moment.In terms of the forward 12-month price/sales, CSCO is trading at 4.04X, higher than its median of 3.69X and the industry’s 3.52X. Price/Sales Ratio (F12M)Image Source: Zacks Investment ResearchCSCO’s Earnings Estimate Indicates Positive TrendFor the second-quarter fiscal 2025, Cisco expects revenues to be $13.75 - $13.95 billion. The non-GAAP earnings per share is expected to be between 89 cents per share and 91 cents per share.The Zacks Consensus Estimate for the second-quarter fiscal 2025 revenues is pegged at $13.86 billion, indicating 8.36% year-over-year growth.The consensus mark for earnings is currently pegged at 91 cents per share, up by a penny over the past 30 days, suggesting year-over-year growth of 4.6%.For fiscal 2025, CSCO expects revenues to be $55.3 - $56.3 billion. The non-GAAP earnings are expected to be between $3.60 per share and $3.66 per share.The Zacks Consensus Estimate for full-year fiscal 2025 revenues is pegged at $55.93 billion, indicating 3.95% year-over-year growth.The consensus mark for fiscal 2025 earnings is currently pegged at $3.64 per share, up by 2 cents over the past 30 days, suggesting a year-over-year decrease of 2.41%.CSCO has beaten the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 4.14%.Cisco Systems, Inc. Price and Consensus Cisco Systems, Inc. price-consensus-chart | Cisco Systems, Inc. Quote Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Rich Partner Base Aids CSCO’s ProspectsCisco is leveraging its robust portfolio and rich partner base with NVIDIA NVDA, Meta Platforms META, Microsoft, Lenovo and AT&T to drive innovation. Its NVIDIA-powered AI server and AI PODs, integrated with NVIDIA’s AI Enterprise cloud-native software and managed via Cisco Intersight, simplify and de-risk AI infrastructure.The Cisco-NVIDIA partnership has also introduced the Cisco Nexus HyperFabric AI cluster solution, an advanced end-to-end infrastructure aimed at scaling generative AI workloads efficiently.Rising demand for Cisco’s Nexus brand is reinforcing its competitive position in the private cloud infrastructure market. The momentum is expected to continue as customers increasingly seek its 400-gig and 800-gig switches powered by Silicon One.Cisco has recently partnered with MGM Resorts International MGM in a 5.5-year deal to provide advanced software and services, enhancing guest and employee experiences across all of MGM Resorts’ properties.CSCO has expanded its collaboration portfolio with the Webex AI Agent, AI Agent Studio, and Cisco AI Assistant features for the Webex Contact Center. The solutions utilize advanced conversational intelligence and automation to boost customer satisfaction.Cisco’s security segment also remains a bright spot, with robust demand for solutions like XDR, Secure Access and Multicloud Defense suites driving growth.However, CSCO has been suffering from sluggish networking sales, primarily due to lackluster demand from telecommunication and cable services providers, as well as stiff competition. Excess inventory with customers has dampened growth. These factors contributed to a 23% year-over-year decline in networking revenues in the first quarter of fiscal 2025.Buy, Sell or Hold the CSCO Stock?While Cisco’s expanding portfolio, strong partnerships and growth in cybersecurity present promising opportunities, challenges in the networking segment pose as headwinds. Stretched valuation also remains a concern.CSCO currently carries a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point in the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cisco Systems, Inc. (CSCO): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report MGM Resorts International (MGM): Free Stock Analysis Report Meta Platforms, Inc. (META): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks