Cisco Systems (NASDAQ:CSCO) Shares Down 1.5% - Here's What Happened

Key Points

• Cisco shares fell 1.5% to $108.59 in midday trading, with volume 39% below the daily average. The decline came amid ETF selling and sensitivity associated with Cisco’s elevated valuation.
• Analysts remain generally positive, citing strong AI-networking and cybersecurity opportunities, while Cisco’s latest quarter beat revenue and EPS estimates. The stock has a “Moderate Buy” consensus rating and an average price target of $128.52.
• Competitive pressure from Arista, HPE and Dell remains a key risk, but Cisco reported 17.6% year-over-year revenue growth and paid a quarterly dividend of $0.42, equivalent to a 1.5% annualized yield.

Cisco Systems, Inc. (NASDAQ:CSCO - Get Free Report)'s stock price was down 1.5% on Thursday. The stock traded as low as $108.28 and last traded at $108.59. 13,385,314 shares changed hands during mid-day trading, a decline of 39% from the average daily volume of 21,935,967 shares. The stock had previously closed at $110.29.

Key Cisco Systems News

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

• Positive Sentiment: Cisco’s AI networking opportunity remains the primary bullish catalyst. Rising hyperscaler demand, expanding products and continued investment in AI infrastructure could help CSCO compete more effectively with Arista Networks and Hewlett Packard Enterprise. Cisco Gains From AI Networking Boom: Can It Outpace HPE & ANET?
• Positive Sentiment: Analysts remain constructive ahead of Cisco’s earnings report, with the company having outperformed the broader market and expectations for continued business momentum. Its latest reported quarter also exceeded consensus revenue and EPS estimates, while revenue grew year over year. Earnings Preview: What to Expect From Cisco’s Report
• Positive Sentiment: The consensus analyst price target of $128.52 indicates potential upside from the recently cited trading level near $108.53, suggesting analysts see further value in CSCO despite its higher earnings multiple. Cisco Systems Stock Has Consensus Price Target of $128.52
• Positive Sentiment: Cisco’s push into AI security, quantum-safe protection and tools for detecting rogue AI agents strengthens its positioning as customers confront emerging cybersecurity risks. What Is Cisco Signaling With Its AI Security and Quantum Safe Push?
• Neutral Sentiment: Recognition of Logicalis US as Cisco’s Americas Managed Services Partner of the Year highlights partner-channel strength and service execution, but is unlikely by itself to materially change near-term earnings expectations. Logicalis US Named Managed Services Partner of the Year
• Negative Sentiment: Competition is intensifying as Dell expands AI security and cyber-resilience capabilities, while Arista and HPE also pursue AI infrastructure spending. This could pressure Cisco’s market share and margins if rivals capture more of the growth. Dell Expands AI Security Capabilities
• Negative Sentiment: ETFs were reported as net sellers of Cisco shares, creating a near-term technical headwind. In addition, CSCO’s elevated valuation leaves the stock more sensitive to any earnings miss or cautious outlook. ETFs Are Net Sellers of Cisco

Analyst Ratings Changes

A number of research firms have commented on CSCO. Rosenblatt Securities increased their price objective on shares of Cisco Systems from $150.00 to $165.00 and gave the company a "buy" rating in a report on Thursday, August 13th. Barclays upped their price target on Cisco Systems from $121.00 to $123.00 and gave the company an "equal weight" rating in a research report on Thursday, August 13th. Truist Financial upped their price target on Cisco Systems from $125.00 to $140.00 and gave the company a "buy" rating in a research report on Thursday, August 13th. HSBC cut Cisco Systems from a "buy" rating to a "hold" rating and cut their price target for the company from $137.00 to $120.00 in a report on Friday, August 14th. Finally, Sanford C. Bernstein started coverage on Cisco Systems in a research report on Wednesday, September 30th. They set a "market perform" rating and a $110.00 price objective on the stock. Three investment analysts have rated the stock with a Strong Buy rating, sixteen have assigned a Buy rating and seven have given a Hold rating to the company's stock. According to MarketBeat, Cisco Systems has an average rating of "Moderate Buy" and an average target price of $128.52.

Cisco Systems Trading Down 1.5%

The firm has a market cap of $428.13 billion, a price-to-earnings ratio of 32.51, a PEG ratio of 2.22 and a beta of 0.99. The business has a fifty day moving average of $110.14 and a two-hundred day moving average of $100.68. The company has a debt-to-equity ratio of 0.39, a quick ratio of 0.79 and a current ratio of 0.93.

Cisco Systems (NASDAQ:CSCO - Get Free Report) last issued its earnings results on Wednesday, August 12th. The network equipment provider reported $1.22 EPS for the quarter, beating analysts' consensus estimates of $1.17 by $0.05. Cisco Systems had a net margin of 20.95% and a return on equity of 30.16%. The business had revenue of $17.25 billion for the quarter, compared to the consensus estimate of $16.84 billion. During the same quarter last year, the firm posted $0.99 EPS. The business's revenue for the quarter was up 17.6% compared to the same quarter last year. Cisco Systems has set its FY 2027 guidance at 5.050-5.110 EPS and its Q1 2027 guidance at 1.320-1.340 EPS. As a group, equities analysts expect that Cisco Systems, Inc. will post 4.42 earnings per share for the current fiscal year.

Cisco Systems Dividend Announcement

The firm also recently announced a quarterly dividend, which was paid on Wednesday, October 21st. Shareholders of record on Friday, October 2nd were paid a $0.42 dividend. This represents a $1.68 dividend on an annualized basis and a yield of 1.5%. The ex-dividend date of this dividend was Friday, October 2nd. Cisco Systems's payout ratio is presently 50.30%.

Insider Buying and Selling

In other news, EVP Oliver Tuszik sold 680 shares of the firm's stock in a transaction dated Monday, September 14th. The stock was sold at an average price of $110.18, for a total transaction of $74,922.40. Following the sale, the executive vice president owned 163,337 shares of the company's stock, valued at $17,996,470.66. This trade represents a 0.41% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Charles Robbins sold 21,628 shares of Cisco Systems stock in a transaction dated Friday, August 14th. The shares were sold at an average price of $111.54, for a total value of $2,412,387.12. Following the transaction, the chief executive officer owned 602,710 shares in the company, valued at $67,226,273.40. This trade represents a 3.46% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders sold 44,869 shares of company stock valued at $5,005,620. 0.01% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently made changes to their positions in CSCO. BlackRock Inc. bought a new stake in shares of Cisco Systems during the second quarter valued at about $42,129,647,000. Bank of America Corp DE purchased a new stake in Cisco Systems in the 2nd quarter worth approximately $5,892,379,000. Bank of New York Mellon Corp bought a new position in shares of Cisco Systems in the second quarter worth $4,714,574,000. Deutsche Bank AG bought a new position in shares of Cisco Systems in the second quarter worth $1,997,004,000. Finally, State Street Corp raised its position in shares of Cisco Systems by 7.0% in the second quarter. State Street Corp now owns 207,106,569 shares of the network equipment provider's stock worth $25,278,492,000 after buying an additional 13,512,872 shares in the last quarter. Institutional investors and hedge funds own 73.33% of the company's stock.

About Cisco Systems

Cisco Systems, Inc is a global technology company that develops networking, cybersecurity, collaboration and observability solutions for businesses, government organizations and service providers. Its offerings include routers, switches, wireless networking equipment, data-center infrastructure, security software and services, as well as technologies that support cloud and hybrid IT environments.

The company also provides collaboration tools through its Webex portfolio, cloud-managed networking through Cisco Meraki and security and observability capabilities that include technologies from Splunk, which Cisco acquired in 2024.

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