Core Insights - Cisco Systems (CSCO) shares are currently trading at a premium with a Value Score of D, reflecting a forward 12-month price/sales ratio of 4.45X, which is higher than the Zacks Computer Networks industry's 4.16X but lower than Arista Networks (18.19X) and Broadcom (21.43X) [1][4][18] Stock Performance - Year-to-date (YTD), CSCO shares have appreciated by 13.8%, underperforming the broader Zacks Computer & Technology sector (15.9%) and peers Broadcom (46.1%) and Arista Networks (28.4%) [4][7] - Since the fourth-quarter fiscal 2025 results were reported on August 13, CSCO shares have dropped by 4.4%, attributed to slowing momentum in networking revenues, which grew by 12% year-over-year to $7.63 billion [5][6] Growth Drivers - AI Infrastructure orders from webscale customers reached $2 billion in fiscal 2025, doubling management's forecast, with over $800 million in orders reported in the fourth quarter [7][9] - Cisco's partnership with NVIDIA is expected to enhance AI capabilities, integrating Cisco Nexus switches with NVIDIA's Spectrum-X architecture for improved networking solutions [11][12] - Networking product orders have shown double-digit growth for four consecutive quarters, driven by demand in webscale infrastructure, switching, enterprise routing, and industrial IoT [13] Security Business - Cisco's security business is experiencing strong demand, with mid-single-digit growth in orders for Cisco Secure Access, Hypershield, and XDR, and a reported 14% year-over-year growth in new logos for Splunk [14] Financial Guidance - For fiscal 2026, Cisco expects revenues between $59 billion and $60 billion, up from $56.7 billion in fiscal 2025, with non-GAAP earnings projected between $4.00 and $4.06 per share [16] - The Zacks Consensus Estimate for fiscal 2026 revenues is $56.58 billion, indicating a year-over-year growth of 5.2%, while earnings are expected to grow by 6% to $4.04 per share [17] Market Position - Cisco's expanding portfolio and focus on AI and security position the company for sustained growth in a changing tech landscape, despite facing challenges from stretched valuations and competitive pressures [18][19]

Core Insights - Cisco Systems Inc. reported strong fourth-quarter fiscal 2025 earnings, exceeding consensus estimates across multiple metrics, driven by robust demand for AI infrastructure products [1][8] - The company has integrated AI into its product offerings, enhancing its networking, security, collaboration, and observability solutions [1][10] Financial Performance - Annual Recurring Revenues (ARR) reached $31.1 billion, reflecting a 5% increase, with product ARR growing by 8% [3] - Total subscription revenues rose by 3% year over year to $7.9 billion, while Remaining Performance Obligations (RPO) increased by 6% to $43.5 billion [3] - Short-term RPO was reported at $21.7 billion, up 4%, indicating a strong recurring revenue base that supports long-term growth prospects [3] Strategic Developments - The acquisition of Splunk significantly enhances Cisco's recurring revenue base and expands its software-based solutions portfolio [4] - The launch of AI-powered Hypershield has strengthened Cisco's security offerings, combining security and networking capabilities [4] - Cisco's partnership with NVIDIA is pivotal, providing solutions for AI-ready data center networks, which is expected to drive enterprise demand [10] Guidance and Estimates - For fiscal 2026, Cisco anticipates revenues between $59 billion and $60 billion, up from $56.7 billion in fiscal 2025, with non-GAAP earnings projected at $4.00 to $4.06 per share [5][8] - The Zacks Consensus Estimate for first-quarter fiscal 2026 shows revenues of $14.77 billion, a 6.7% year-over-year increase, and earnings per share of $0.98, reflecting a 7.7% increase [6] Market Performance - Cisco has provided a year-to-date return of 13.7%, outperforming the S&P 500's return of 10.2% [11] - The average price target from brokerage firms suggests a potential increase of 13.5% from the last closing price, indicating a favorable risk-reward ratio [11] Investment Considerations - Cisco holds a Zacks Rank 2 (Buy), with a forward P/E of 16.67X, which is competitive compared to the industry and S&P 500 averages [12] - The company's return on equity stands at 27.02%, significantly higher than the industry average [12]

Core Insights - Cisco Systems (CSCO) shares have declined 6% following the fiscal Q4 2025 results, primarily due to slowing momentum in networking revenues, which grew 12% year over year to $7.63 billion [1][8] - The decline in stock price presents a potential buying opportunity for investors, especially considering Cisco's strong momentum in AI [1] Financial Performance - In fiscal Q4 2025, AI Infrastructure orders from webscale customers exceeded $800 million, leading to total revenues of $2 billion for fiscal 2025, which is double the management's original expectations [2] - Annual Recurring Revenues (ARR) reached $31.1 billion, up 5%, with product ARR growing by 8%. Total subscription revenues increased 3% year over year to $7.9 billion, accounting for 54% of total revenues [3] - Total Remaining Performance Obligations (RPO) increased 6% year over year to $43.5 billion, with product RPO growing 8% [3] Market Position and Comparisons - Year to date, CSCO shares have appreciated 11.8%, underperforming the broader Zacks Computer & Technology sector, which has appreciated 13.7%, and peers Broadcom (AVGO) and Arista Networks (ANET), which have appreciated 32.1% and 24.2%, respectively [4] - Cisco's shares are trading at a premium with a forward 12-month price/sales ratio of 4.65X, compared to the industry average of 4.14X, but are trading at a discount compared to Arista Networks and Broadcom [15][18] Future Guidance - For fiscal 2026, Cisco expects revenues between $59 billion and $60 billion, an increase from $56.7 billion in fiscal 2025, with projected non-GAAP earnings per share between $4 and $4.06 [8][13] - The Zacks Consensus Estimate for fiscal 2026 revenues is $56.58 billion, indicating a year-over-year growth of 5.2%, while the consensus for earnings is $4.02 per share, reflecting a growth of 5.5% [14] Strategic Initiatives - Cisco's aggressive push into AI and its growing security business are significant growth drivers, with strong demand for products like Cisco Secure Access and XDR [9][11] - The partnership with NVIDIA is expected to enhance Cisco's AI capabilities, offering solutions for AI-ready data center networks [12] Investment Outlook - An expanding portfolio positions Cisco for sustained growth in the evolving tech landscape, particularly in AI and security [21] - Cisco currently holds a Zacks Rank 2 (Buy), indicating a favorable investment opportunity for accumulation [21]

Core Insights - Cisco Systems (CSCO) reported fourth-quarter fiscal 2025 non-GAAP earnings of 99 cents per share, exceeding the Zacks Consensus Estimate by 2.06% and reflecting a year-over-year increase of 13.8% [1] - Revenues reached $14.67 billion, surpassing the Zacks Consensus Estimate by 0.47% and showing a year-over-year growth of 7.6% [1] - Total Annual Recurring Revenues (ARR) were $31.1 billion, up 5%, with product ARR growth of 8% [1] Financial Performance - Fourth-quarter revenues from Networking were $7.63 billion, up 12% year over year; Security revenues were $1.95 billion, up 9%; Collaboration revenues were $1.04 billion, up 2%; and Observability revenues were $259 million, up 4% [4] - Total Product revenues in Q4 were $10.89 billion, accounting for 74.2% of total revenues, with a year-over-year increase of 10%; Service Revenues were $3.79 billion, flat year over year [5] - Operating expenses totaled $5 billion, up 3.6% year over year, but as a percentage of revenues, they declined by 130 basis points; non-GAAP operating income was $5.03 billion, up 13.3% year over year, with an operating margin of 34.3% [10] Regional Performance - Americas' revenues increased 9% year over year to $8.82 billion; EMEA revenues climbed 4% to $3.65 billion; APJC revenues rose 7% to $2.21 billion [6] AI Infrastructure and Partnerships - AI Infrastructure orders from webscale customers exceeded $800 million, contributing to total revenues of $2 billion in fiscal 2025, which is double the original expectation [6][9] - Cisco's partnership with NVIDIA is enhancing its offerings, particularly in AI infrastructure, with the integration of Cisco Nexus switches and NVIDIA's Spectrum-X architecture [7] Balance Sheet and Shareholder Returns - As of July 26, 2025, cash and cash equivalents and investments totaled $16.1 billion, up from $15.6 billion; total debt decreased to $28.1 billion from $29.2 billion [11] - Remaining performance obligations (RPO) were $43.5 billion, up 6%, with 50% expected to be recognized as revenues in the next 12 months; Cisco returned $2.9 billion to stockholders through share buybacks and dividends [12] Guidance - For Q1 fiscal 2026, Cisco expects non-GAAP earnings between 97 cents and 99 cents per share, with revenues projected between $14.65 billion and $14.85 billion [13] - For fiscal 2026, non-GAAP earnings are expected to be between $4 and $4.06 per share, with revenues anticipated between $59 billion and $60 billion [14]

Financial Performance - Q4 FY25 - Cisco's Q4 FY25 revenue reached $14673 million, an increase of 8% year-over-year[5,30,36,37] - Non-GAAP EPS was $099, up 14% year-over-year[5,37] - Total RPO increased by 6% year-over-year to $435 billion, with product RPO up 8% year-over-year[5,31] - Total ARR grew by 5% year-over-year to $311 billion, with product ARR up 8% year-over-year[5,31] Financial Performance - FY25 - FY25 revenue was $56654 million, a 5% increase year-over-year[40,41] - FY25 Non-GAAP EPS was $381, a 2% increase year-over-year[41] - The company returned $124 billion to shareholders in FY25[5,39] AI and Infrastructure - AI infrastructure orders from webscale customers exceeded $800 million in Q4, bringing the FY25 total to over $2 billion, more than double the original target[5,12] - Product orders increased by 7% year-over-year, with growth across all geographies[5,34,35] - Data Center Switching orders grew in the mid-teens year-over-year[12] Guidance - Cisco projects Q1 FY26 revenue between $1465 billion and $1485 billion[44] - Cisco anticipates FY26 revenue between $59 billion and $60 billion[45]