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Cisco Systems Q3 Preview: Another EPS Beat Inbound?

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The Zacks Computer and Technology sector has been strong over the last month, up 11% and marginally outperforming the S&P 500.

A widely-recognized name in the realm, Cisco Systems, Inc. (CSCO - Free Report) , is on deck to unveil Q1 earnings on November 16th, after the market close.

Cisco Systems is an IP-based networking company offering products and services to service providers, companies, commercial users, and individuals.

Currently, the company carries a Zacks Rank #3 (Hold) paired with an overall VGM Score of a B.

How does everything else stack up? Let’s take a closer look.

Share Performance & Valuation

CSCO shares have struggled to find their footing in 2022, down more than 25% and underperforming the S&P 500 by a fair margin.

Zacks Investment Research
Image Source: Zacks Investment Research

However, over the last month, CSCO shares have tacked on nearly 10% in value, outperforming the S&P 500 by a fair margin and indicating that buyers have finally stepped up to the plate.

Zacks Investment Research
Image Source: Zacks Investment Research

CSCO shares currently trade at a 14.5X forward earnings multiple, nicely beneath the 17.1X five-year median and representing a 36% discount relative to the Zacks Computer and Technology sector.

The company sports a Style Score of a B for Value.

Zacks Investment Research
Image Source: Zacks Investment Research

Quarterly Estimates

A singular analyst has upped their earnings outlook over the last several months, with the Zacks Consensus EPS Estimate of $0.84 suggesting a 2.5% Y/Y uptick in earnings.

Zacks Investment Research
Image Source: Zacks Investment Research

Cisco’s top-line also looks to register some growth, with the Zacks Consensus Sales Estimate of $13.3 billion indicating an improvement of 3.3% from year-ago quarterly sales of $12.9 billion.

Quarterly Performance

CSCO has an impressive earnings track record, exceeding the Zacks Consensus EPS Estimate in 20 consecutive quarters. Just in its latest print, the company registered a modest 1.2% bottom-line beat.

Top-line results have been primarily mixed across its last four reports, with two revenue beats and two misses. Below is a chart illustrating the company’s revenue on a quarterly basis.

Zacks Investment Research
Image Source: Zacks Investment Research

Putting Everything Together

CSCO shares are in the red year-to-date but have outperformed the S&P 500 over the last month, perhaps indicating that the tide has started to turn.

The company sports a Style Score of a B for Value, with its current forward earnings multiple well below its five-year median and Zacks sector average.

One analyst has upped their earnings outlook for the quarter, with estimates indicating a Y/Y uptick in both revenue and earnings.

CSCO has consistently exceeded EPS expectations, but revenue results have been primarily mixed as of late.

Heading into the release, Cisco Systems, Inc. (CSCO - Free Report) carries a Zacks Rank #3 (Hold) paired with an Earnings ESP Score of 1.5%.


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