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Cisco (CSCO) Stock Earnings Preview: Can the Run Continue?

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Cisco (CSCO - Free Report) might be a relatively boring name in the tech world, but its stock performance has been pretty exciting lately. Shares are at fresh highs these days, and the stock has recovered nicely from its rough start to 2016.

But given how the cloud is really driving stock returns across the tech sector lately, there could be some questions for CSCO leading into its report. However, you shouldn’t count CSCO out just yet, as the company has an incredible history when it comes to beating earnings estimates, as you can see in the chart below:

CISCO SYSTEMS Price and EPS Surprise

CISCO SYSTEMS Price and EPS Surprise | CISCO SYSTEMS Quote

But these beats haven’t always transitioned into big gains in earnings season, meaning that other metrics, such as guidance will be key for CSCO in its coming report. Fortunately for CSCO though, earnings estimates have been rising, though they have flat-lined lately. In fact, CSCO recently fell from a ‘buy’ down into ‘hold’ territory so it may be losing a bit of its momentum heading into the release.

CISCO SYSTEMS Price and Consensus

CISCO SYSTEMS Price and Consensus | CISCO SYSTEMS Quote

Bottom Line

Cisco appears ready to beat again, but this looks to be another case where guidance will reign supreme. The company does at least have a solid Value Score and a top notch industry rank at its back though, so it is hard to bet against CSCO, but investors shouldn’t expect too much out of the company thanks to falling momentum and a lack of rising estimates leading up into the report.

For a more in-depth analysis of CSCO, make sure to watch our short video on the topic. And for additional insights on trading earnings reports, listen to the podcast below:


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