We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Cisco's Security Portfolio Gains Traction: A Sign of More Upside?
Read MoreHide Full Article
Key Takeaways
Cisco's security business grew with $1.95B in revenues, up 9% year over year in fiscal Q4.
Splunk synergies added 14% growth in new logos, while 750 new customers joined.
Cisco guides Q1 fiscal 2026 revenues of $14.65B to $14.85B, up 6.7% year over year.
Cisco Systems’ (CSCO - Free Report) security business is benefiting from strong demand for Cisco Secure Access, Hypershield and XDR. In the fourth quarter of fiscal 2025, orders grew mid-single-digit. Splunk and Cisco synergies reported 14% year-over-year growth in new logos for Splunk. Secure Access, XDR, Hypershield and AI Defense added 750 new customers collectively in the reported quarter.
Security revenues were $1.95 billion, up 9% year over year, driven by growth in Cisco’s offerings from Splunk and SASE. In terms of order growth, Cisco saw mid-single-digit growth in the fiscal fourth quarter. Excluding sluggish U.S. federal order growth, rest of the world security order growth increased double digits in the fiscal fourth quarter.
Cisco’s collaboration with NVIDIA (NVDA - Free Report) , under which the company integrates Nexus switches with Spectrum-X architecture and advances Secure AI Factory solutions, strengthens Cisco’s leadership in the long run. The company believes that by fusing security deep into the network, agentic AI can only be secured, and Cisco is well-positioned to deliver this capability.
Apart from growing security traction, Cisco’s diversified portfolio, strong hyperscaler relationships and expanding presence with emerging cloud clients provide a solid foundation for sustained growth. Cisco expects first-quarter fiscal 2026 revenues between $14.65 billion and $14.85 billion. The Zacks Consensus Estimate for first-quarter fiscal 2026 is pegged at $14.77 billion, indicating 6.7% growth from the figure reported in the year-ago quarter.
CSCO Suffers from Intensifying Competition
Cisco is facing stiff competition from Broadcom (AVGO - Free Report) and Okta (OKTA - Free Report) in the enterprise security space.
Broadcom’s security offerings are a part of its broader Infrastructure Software solution that accounted for 44% of revenues in the second quarter of fiscal 2025. In March, Broadcom introduced updates to VMware vDefend, improving security planning, lifecycle management, and scalability for VCF with new tools like the Security Segmentation Assessment and Report, optimized micro-segmentation, and advanced Network Detection and Response, all aimed at improving threat prevention and operational efficiency. In April, Broadcom introduced Incident Prediction, which extends the security feature of Adaptive Protection, a unique capability of Symantec Endpoint Security Complete (SES-C).
Okta’s offerings include Okta AI, a suite of AI-powered capabilities embedded across several products, which empowers organizations to harness AI to build better experiences and protect against cyberattacks. The company benefits from strong demand for its new products, including Identity Governance, Privileged Access, Device Access, Fine Grained Authorization, Identity Security Posture Management, and Identity Threat Protection with Okta AI.
Cisco shares have appreciated 16.7% year to date, outperforming the broader Zacks Computer and Technology sector’s return of 12.9%.
CSCO Stock’s Performance
Image Source: Zacks Investment Research
Cisco stock is overvalued, with a forward 12-month price/sales of 4.59X compared with the Zacks Computer Networking industry’s 4.31X. CSCO currently has a Value Score of D.
CSCO Valuation
Image Source: Zacks Investment Research
Cisco expects first-quarter fiscal 2026 earnings between 97 cents and 99 cents per share. The Zacks Consensus Estimate for first-quarter fiscal 2026 earnings is pegged at 98 cents per share, unchanged over the past 30 days, suggesting 7.7% year-over-year growth.
Image: Bigstock
Cisco's Security Portfolio Gains Traction: A Sign of More Upside?
Key Takeaways
Cisco Systems’ (CSCO - Free Report) security business is benefiting from strong demand for Cisco Secure Access, Hypershield and XDR. In the fourth quarter of fiscal 2025, orders grew mid-single-digit. Splunk and Cisco synergies reported 14% year-over-year growth in new logos for Splunk. Secure Access, XDR, Hypershield and AI Defense added 750 new customers collectively in the reported quarter.
Security revenues were $1.95 billion, up 9% year over year, driven by growth in Cisco’s offerings from Splunk and SASE. In terms of order growth, Cisco saw mid-single-digit growth in the fiscal fourth quarter. Excluding sluggish U.S. federal order growth, rest of the world security order growth increased double digits in the fiscal fourth quarter.
Cisco’s collaboration with NVIDIA (NVDA - Free Report) , under which the company integrates Nexus switches with Spectrum-X architecture and advances Secure AI Factory solutions, strengthens Cisco’s leadership in the long run. The company believes that by fusing security deep into the network, agentic AI can only be secured, and Cisco is well-positioned to deliver this capability.
Apart from growing security traction, Cisco’s diversified portfolio, strong hyperscaler relationships and expanding presence with emerging cloud clients provide a solid foundation for sustained growth. Cisco expects first-quarter fiscal 2026 revenues between $14.65 billion and $14.85 billion. The Zacks Consensus Estimate for first-quarter fiscal 2026 is pegged at $14.77 billion, indicating 6.7% growth from the figure reported in the year-ago quarter.
CSCO Suffers from Intensifying Competition
Cisco is facing stiff competition from Broadcom (AVGO - Free Report) and Okta (OKTA - Free Report) in the enterprise security space.
Broadcom’s security offerings are a part of its broader Infrastructure Software solution that accounted for 44% of revenues in the second quarter of fiscal 2025. In March, Broadcom introduced updates to VMware vDefend, improving security planning, lifecycle management, and scalability for VCF with new tools like the Security Segmentation Assessment and Report, optimized micro-segmentation, and advanced Network Detection and Response, all aimed at improving threat prevention and operational efficiency. In April, Broadcom introduced Incident Prediction, which extends the security feature of Adaptive Protection, a unique capability of Symantec Endpoint Security Complete (SES-C).
Okta’s offerings include Okta AI, a suite of AI-powered capabilities embedded across several products, which empowers organizations to harness AI to build better experiences and protect against cyberattacks. The company benefits from strong demand for its new products, including Identity Governance, Privileged Access, Device Access, Fine Grained Authorization, Identity Security Posture Management, and Identity Threat Protection with Okta AI.
CSCO’s Share Price Performance, Valuation & Estimates
Cisco shares have appreciated 16.7% year to date, outperforming the broader Zacks Computer and Technology sector’s return of 12.9%.
CSCO Stock’s Performance
Image Source: Zacks Investment Research
Cisco stock is overvalued, with a forward 12-month price/sales of 4.59X compared with the Zacks Computer Networking industry’s 4.31X. CSCO currently has a Value Score of D.
CSCO Valuation
Image Source: Zacks Investment Research
Cisco expects first-quarter fiscal 2026 earnings between 97 cents and 99 cents per share. The Zacks Consensus Estimate for first-quarter fiscal 2026 earnings is pegged at 98 cents per share, unchanged over the past 30 days, suggesting 7.7% year-over-year growth.
Cisco Systems, Inc. Price and Consensus
Cisco Systems, Inc. price-consensus-chart | Cisco Systems, Inc. Quote
Cisco currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.