Cisco Systems (NASDAQ:CSCO) Trading 13.4% Higher Following Better-Than-Expected Earnings

Key Points

• Cisco shares jumped 13.4% after the company reported better-than-expected quarterly results, with the stock trading sharply higher on very heavy volume.
• Cisco posted Q3 EPS of $1.06 on revenue of $15.84 billion, both ahead of analyst estimates, and revenue rose 12% year over year.
• The company raised full-year guidance and said it has about $9 billion in hyperscaler AI infrastructure orders, reinforcing expectations that AI-related networking demand is driving growth.

Cisco Systems, Inc. (NASDAQ:CSCO - Get Free Report)'s share price traded up 13.4% on Thursday following a stronger than expected earnings report. The company traded as high as $119.36 and last traded at $115.53. 70,276,723 shares traded hands during mid-day trading, an increase of 204% from the average session volume of 23,141,721 shares. The stock had previously closed at $101.87.

The network equipment provider reported $1.06 EPS for the quarter, topping the consensus estimate of $1.03 by $0.03. Cisco Systems had a net margin of 19.22% and a return on equity of 27.88%. The business had revenue of $15.84 billion during the quarter, compared to analyst estimates of $15.56 billion. During the same period in the prior year, the business earned $0.96 EPS. The company's revenue for the quarter was up 12.0% on a year-over-year basis. Cisco Systems has set its Q4 2026 guidance at 1.160-1.180 EPS and its FY 2026 guidance at 4.270-4.290 EPS.

Cisco Systems Dividend Announcement

The company also recently disclosed a quarterly dividend, which will be paid on Wednesday, July 22nd. Shareholders of record on Monday, July 6th will be issued a $0.42 dividend. The ex-dividend date is Monday, July 6th. This represents a $1.68 dividend on an annualized basis and a yield of 1.5%. Cisco Systems's dividend payout ratio is 58.95%.

Key Headlines Impacting Cisco Systems

Here are the key news stories impacting Cisco Systems this week:

• Positive Sentiment: Cisco posted Q3 EPS of $1.06 on revenue of $15.84 billion, both ahead of estimates, with revenue up 12% year over year and management calling out very strong networking demand. Cisco Reports Third Quarter Earnings
• Positive Sentiment: The company raised FY2026 guidance to $4.27-$4.29 in EPS and $62.8 billion-$63.0 billion in revenue, signaling confidence that the AI-driven networking cycle is still gaining momentum. Cisco soars after Q4 guidance tops estimate by nearly $1B as AI infrastructure takes off
• Positive Sentiment: Management said Cisco has about $9 billion in hyperscaler AI infrastructure orders for FY2026, reinforcing the view that the company is becoming a key beneficiary of AI data center spending. Cisco outlines ~$9B FY 2026 hyperscaler AI infrastructure orders
• Positive Sentiment: Several analysts raised price targets after the report, with firms including Evercore, Wells Fargo, BNP Paribas Exane, and Morgan Stanley lifting targets on the shares. Cisco stock rallies most since 2011 in post-earnings momentum breakout
• Neutral Sentiment: Cisco also announced a restructuring that includes cutting about 4,000 jobs to redirect spending toward AI investments; investors appear to be focusing more on the growth opportunity than the near-term cost. Reuters Cisco jumps on strong revenue forecast, AI push with job cuts

Analysts Set New Price Targets

CSCO has been the subject of a number of research reports. BNP Paribas Exane increased their price objective on Cisco Systems from $87.00 to $132.00 and gave the stock an "outperform" rating in a report on Thursday. Weiss Ratings reiterated a "buy (b)" rating on shares of Cisco Systems in a report on Friday, April 24th. Citigroup increased their price objective on Cisco Systems from $90.00 to $112.00 and gave the stock a "buy" rating in a report on Thursday. Argus upgraded Cisco Systems to a "strong-buy" rating in a report on Friday, February 13th. Finally, DZ Bank upgraded Cisco Systems to a "strong-buy" rating in a report on Friday, February 13th. Three investment analysts have rated the stock with a Strong Buy rating, fourteen have given a Buy rating and nine have given a Hold rating to the stock. Based on data from MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and a consensus target price of $108.32.

Insider Transactions at Cisco Systems

In other news, SVP Maria Victoria Wong sold 551 shares of the stock in a transaction on Wednesday, March 11th. The stock was sold at an average price of $77.54, for a total value of $42,724.54. Following the sale, the senior vice president directly owned 27,957 shares of the company's stock, valued at approximately $2,167,785.78. This represents a 1.93% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. Also, EVP Oliver Tuszik sold 3,132 shares of the stock in a transaction on Wednesday, March 18th. The stock was sold at an average price of $79.74, for a total value of $249,745.68. Following the completion of the sale, the executive vice president directly owned 188,613 shares in the company, valued at approximately $15,040,000.62. This represents a 1.63% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last 90 days, insiders sold 46,431 shares of company stock valued at $3,574,820. 0.01% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Cisco Systems

A number of institutional investors have recently modified their holdings of the stock. Norges Bank purchased a new stake in shares of Cisco Systems during the fourth quarter valued at $4,473,272,000. Auto Owners Insurance Co boosted its position in shares of Cisco Systems by 8,718.3% during the fourth quarter. Auto Owners Insurance Co now owns 51,952,421 shares of the network equipment provider's stock valued at $400,190,000 after buying an additional 51,363,281 shares during the last quarter. Price T Rowe Associates Inc. MD boosted its position in shares of Cisco Systems by 103.2% during the fourth quarter. Price T Rowe Associates Inc. MD now owns 29,289,151 shares of the network equipment provider's stock valued at $2,256,144,000 after buying an additional 14,874,407 shares during the last quarter. Arrowstreet Capital Limited Partnership boosted its position in shares of Cisco Systems by 110.2% during the third quarter. Arrowstreet Capital Limited Partnership now owns 18,406,442 shares of the network equipment provider's stock valued at $1,259,369,000 after buying an additional 9,648,265 shares during the last quarter. Finally, Franklin Resources Inc. boosted its position in shares of Cisco Systems by 18.0% during the fourth quarter. Franklin Resources Inc. now owns 50,320,905 shares of the network equipment provider's stock valued at $3,876,219,000 after buying an additional 7,679,422 shares during the last quarter. 73.33% of the stock is owned by hedge funds and other institutional investors.

Cisco Systems Price Performance

The company has a debt-to-equity ratio of 0.45, a current ratio of 0.96 and a quick ratio of 0.85. The company has a market capitalization of $456.33 billion, a PE ratio of 40.54, a PEG ratio of 3.73 and a beta of 0.92. The firm has a 50-day moving average of $83.93 and a 200 day moving average of $79.36.

Cisco Systems Company Profile

Cisco Systems, Inc is a global technology company that designs, manufactures and sells networking hardware, software and telecommunications equipment. Its core business focuses on enabling enterprise and service-provider networks through products such as routers, switches, network security appliances and wireless systems. Over time Cisco has broadened its portfolio to emphasize software-defined networking, cybersecurity, cloud infrastructure and edge computing solutions that help organizations build and manage modern IT environments.

In addition to hardware, Cisco offers a growing range of software platforms and subscription services for network management, security, analytics and collaboration.

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