Cisco Systems (NASDAQ:CSCO) Shares Down 3.8% - Time to Sell?

Key Points

• Cisco shares fell 3.8% to $104.51 in mid-day trading, with volume 11% above the average, as investors appeared to demand stronger earnings and guidance from a stock trading at a relatively elevated valuation.
• Despite the decline, Cisco’s outlook is supported by AI infrastructure, hyperscaler networking demand, 5G, Wi-Fi 7, cybersecurity and virtualization opportunities. Competitive pressure from Dell and the uncertain near-term impact of newer AI-security initiatives remain risks.
• Analysts maintain a favorable view, with a “Moderate Buy” consensus and an average price target of $128.52; Cisco’s latest quarter also exceeded expectations, reporting $1.22 in adjusted EPS and $17.25 billion in revenue.

Shares of Cisco Systems, Inc. (NASDAQ:CSCO - Get Free Report) fell 3.8% during mid-day trading on Friday. The stock traded as low as $103.14 and last traded at $104.51. 24,294,296 shares changed hands during mid-day trading, an increase of 11% from the average session volume of 21,947,719 shares. The stock had previously closed at $108.59.

Key Cisco Systems News

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

• Positive Sentiment: AI infrastructure remains a key growth catalyst. Cisco is benefiting from rising hyperscaler demand for networking equipment, while AI workloads, 5G, Wi-Fi 7, and broader connectivity needs support the networking industry’s expansion. Cisco Gains From AI Networking Boom
• Positive Sentiment: Industry research projects the global virtualization-security market will grow from $1.7 billion in 2025 to $4.9 billion by 2032, creating potential demand for Cisco’s security, segmentation, and cloud-native offerings. Virtualization Security Market Report
• Positive Sentiment: Mobile virtualization is projected to reach $21 billion by 2032, with remote work, BYOD, 5G, and tighter data regulations supporting longer-term opportunities for Cisco’s networking and security businesses. Mobile Virtualization Market Report
• Positive Sentiment: Analysts maintain a favorable view ahead of earnings, with a reported consensus price target of $128.52, implying continued confidence in Cisco’s outlook. Cisco Consensus Price Target
• Positive Sentiment: Cisco is experimenting with an AI-assisted rewrite of approximately 98% of its code under a young engineering leader, potentially improving development speed and product productivity, although execution remains unproven. Cisco AI Code Rewrite
• Neutral Sentiment: Cisco’s upcoming report is receiving positive analyst attention after the stock outperformed the broader market, but the preview also raises the bar for results and forward guidance. Cisco Earnings Preview
• Neutral Sentiment: The company’s AI-security and quantum-safe initiatives could strengthen its long-term product portfolio, though the articles provide limited evidence of near-term financial impact. Cisco AI Security and Quantum-Safe Push
• Negative Sentiment: Competitive pressure is increasing: Dell is expanding its AI-security and cyber-resilience capabilities, potentially challenging Cisco in enterprise infrastructure and security markets. Dell Expands AI Security Capabilities
• Negative Sentiment: Recent weakness relative to the broader market suggests investors may be taking profits or demanding stronger earnings and guidance, particularly with CSCO trading at a relatively elevated earnings multiple.

Analyst Upgrades and Downgrades

A number of research firms have recently commented on CSCO. Rosenblatt Securities boosted their price objective on Cisco Systems from $150.00 to $165.00 and gave the company a "buy" rating in a research report on Thursday, August 13th. Truist Financial lifted their price objective on Cisco Systems from $125.00 to $140.00 and gave the stock a "buy" rating in a research report on Thursday, August 13th. Morgan Stanley upped their target price on Cisco Systems from $130.00 to $135.00 and gave the company an "overweight" rating in a report on Thursday, August 13th. Deutsche Bank Aktiengesellschaft started coverage on Cisco Systems in a report on Tuesday, September 1st. They set a "buy" rating and a $135.00 price target on the stock. Finally, Wells Fargo & Company upped their price target on Cisco Systems from $130.00 to $150.00 and gave the company an "overweight" rating in a research note on Thursday, August 13th. Three equities research analysts have rated the stock with a Strong Buy rating, sixteen have issued a Buy rating and seven have assigned a Hold rating to the stock. Based on data from MarketBeat, the stock currently has an average rating of "Moderate Buy" and an average price target of $128.52.

Cisco Systems Price Performance

The company has a 50 day moving average of $110.10 and a 200 day moving average of $100.86. The company has a debt-to-equity ratio of 0.39, a quick ratio of 0.79 and a current ratio of 0.93. The stock has a market capitalization of $412.04 billion, a price-to-earnings ratio of 31.29, a PEG ratio of 2.30 and a beta of 0.99.

Cisco Systems (NASDAQ:CSCO - Get Free Report) last issued its earnings results on Wednesday, August 12th. The network equipment provider reported $1.22 earnings per share for the quarter, beating the consensus estimate of $1.17 by $0.05. The firm had revenue of $17.25 billion for the quarter, compared to analysts' expectations of $16.84 billion. Cisco Systems had a net margin of 20.95% and a return on equity of 30.16%. The firm's revenue was up 17.6% compared to the same quarter last year. During the same quarter last year, the company earned $0.99 earnings per share. 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 research analysts anticipate that Cisco Systems, Inc. will post 4.42 EPS for the current year.

Cisco Systems Announces Dividend

The business also recently disclosed a quarterly dividend, which was paid on Wednesday, October 21st. Stockholders of record on Friday, October 2nd were given a dividend of $0.42 per share. This represents a $1.68 annualized dividend and a dividend yield of 1.6%. The ex-dividend date was Friday, October 2nd. Cisco Systems's payout ratio is currently 50.30%.

Insider Buying and Selling

In other Cisco Systems news, EVP Oliver Tuszik sold 2,760 shares of the firm's stock in a transaction dated Friday, August 14th. The stock was sold at an average price of $112.46, for a total transaction of $310,389.60. Following the transaction, the executive vice president owned 165,276 shares of the company's stock, valued at approximately $18,586,938.96. This trade represents a 1.64% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Jeetendra Patel sold 7,170 shares of the firm's stock in a transaction that occurred on Friday, August 14th. The stock was sold at an average price of $111.57, for a total value of $799,956.90. Following the transaction, the insider owned 230,593 shares in the company, valued at $25,727,261.01. This represents a 3.02% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 44,869 shares of company stock valued at $5,005,620 over the last ninety days. Company insiders own 0.01% of the company's stock.

Institutional Trading of Cisco Systems

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

Cisco Systems Company Profile

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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