Cisco Systems, Inc. (NASDAQ:CSCO): a Look into Earnings & What Analysts are Expecting


In looking at Cisco Systems, Inc. (NASDAQ:CSCO)’s latest quarterly report, we can see that 8 analysts had expected that the firm would post earnings of $0.55 for the period ending on 2016-07-31.  On 2016-08-17, the firm reported actual earnings of $0.58 for fiscal Q4 representing an EPS surprise amount in per share dollar terms of $0.03.  Just prior to the release, analyst’s estimates had a standard deviation of 0.01. 

Looking ahead to the next fiscal quarter, Wall Street analysts are expecting earnings per share of 0.54 for the period closing on 2016-10-31. This is the Zacks Consensus estimate calculated as the arithmetic average of all the individual analyst EPS estimates according to their own proprietary methodology (BNRI Accounting).  Investors are expecting that Cisco Systems, Inc. (NASDAQ:CSCO) will issue their earnings release on or around 2016-11-16. In comparing the results to the same quarter a year ago, the firm posted earnings of $0.54 for the period which endend on 2015-10-31.

Analyst Sentiment

Leading up to the next earnings announcements investors should pay close attention to the analysts sentiment on the stock and which direction they are revising their estimates.  Over the past 6 months 1 sell-side analysts have lowered their long term earnings per share estimates on the stock.  During that same period 3 analysts have increased their earnings expectations for the firm.  So what does this mean?  Typically if a large percentage of analysts lower their revisions, the company is more likely to disappoint the Street.  If a large number of brokerage firms increase estimates prior to earnings, the company is more likely to impress with their numbers.

Looking ahead to long term projections, Zacks has calculated a long term mean estimate of 7.59.  This is the best estimate for both revenue and earnings over the next three to five years.  Three months ago this number stood at 7.51.

Analyst Price Targets

Now turning to where analysts believe Cisco Systems, Inc. (NASDAQ:CSCO) shares are headed.  According to the 21 analysts covering the shares, the consensus price target stands at $32.333.  The standard deviation of all estimates is $4.27.  The most aggressive analyst on the name has a price target of $40.  The analyst with the most bearish outlook on the stock has a target price of $22.  The latest analyst revision was recorded on 2016-09-29.

Each of the 21 covering analysts have also provided a Buy, Sell or Hold recommendation on the stock.  As of 2016-10-16, 15 have a Strong Buy rating on the stock, 2 have a Buy rating, 6 have a Hold rating and 0 have a Sell or Strong Sell.  Taking a look back three months ago to compare sentiment, at that time 15 had a Strong Buy, 2 had a Buy, 7 had a Hold and 0 had a sell rating. 

Zacks breaks all of the recommendations down into a integer based number in order to get an average recommendation rating on the stock.  The scale is on a 1 to 5 basis where 1 represents a Strong Buy and 5 a Strong Sell.  Cisco Systems, Inc. (NASDAQ:CSCO) has a mean recommendation of 1.75.  In looking at the historical ratings numbers we can see that the stock had a mean rating of 1.7 one month ago, 1.73 two months ago and 1.8 three months ago. 


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