Dear Cisco Stock Fans, Earnings Are Just Around the Corner

A particular kind of pressure comes from performing well. Cisco Systems (CSCO) built it for itself. After a fiscal third quarter that blew past its own guidance, the company is now walking into its fiscal fourth-quarter 2026 report, due in the coming weeks, with expectations it essentially wrote.

Artificial intelligence (AI) infrastructure spending is pouring into Cisco's order book, enterprises are in the thick of a campus networking refresh cycle, and routing demand hasn't cooled off. Then there's Cisco's growing push into AI-powered security and observability. It's a signal that the company is expanding its stake in the infrastructure that makes AI work. Further, both revenue and EPS posted double-digit growth, and the company beat estimates on both lines. 

Now, with Q4 guidance pointing to another quarter of double-digit growth, investors will be watching closely to see whether Cisco can maintain that streak and justify the growing optimism surrounding its AI-led transformation.

About Cisco Stock

Headquartered in San Jose, California, Cisco develops networking, cybersecurity, collaboration, cloud, data center, wireless, Webex, analytics, and managed service technologies. With a market cap of $456.7 billion, it provides networking infrastructure, security, observability, communication, technical support, consulting, and managed services.

Cisco's shares have rewarded shareholders handsomely during the past year. Shares have climbed 76.9% over the last 52 weeks, including an impressive 49.3% gain in just the past six months. 

From a valuation standpoint, CSCO stock is trading at 27.09 times forward adjusted price-to-earnings and 7.26 times forward sales. Both multiples sit above the industry averages as well as the company's own five-year averages, suggesting investors continue to assign the stock a premium valuation.

Meanwhile, dividend investors have quieter reasons to like the stock. The company has increased its dividend for 14 consecutive years and currently pays an annual dividend of $1.68 per share, translating to a 1.45% yield. Its latest quarterly dividend of $0.42 per share was distributed on July 22 to shareholders of record as of July 6.

Cisco Surpasses Q3 Earnings

Cisco reported its fiscal third-quarter 2026 results on May 13, triggering a positive market reaction. The stock gained 2.6% on the day of the announcement before rallying another 13.4% in the following trading session.

Revenue climbed 12% year-over-year (YOY) to $15.8 billion, comfortably ahead of analysts' expectations of $15.55 billion. Non-GAAP EPS increased 10.4% from the prior-year period to $1.06, beating the Street’s estimate of $1.04.

Growth remained broad-based across the business. Product revenue rose 17%, supported once again by robust demand for AI infrastructure and campus networking solutions. Meanwhile, services revenue came in at $3.7 billion, down 1% YOY, primarily because of the timing of service contract renewals.

Strong customer demand was evident across Cisco's order book. Total product orders increased 35% YOY during the quarter. Excluding hyperscaler customers, whose orders expanded at a triple-digit rate, product orders still advanced 19%, highlighting healthy demand across enterprise markets.

Networking continued to lead the way. Networking product orders jumped more than 50%, campus networking orders grew more than 25%, and data center switching orders increased by over 40% YOY. These results underscore broad-based strength across Cisco's core networking portfolio.

Demand from hyperscale customers also continued to accelerate. AI infrastructure orders reached $5.3 billion year-to-date (YTD), prompting Cisco to raise its fiscal 2026 AI infrastructure order outlook to $9 billion. Also, the company lifted its projected AI infrastructure revenue target to $4 billion, up from $3 billion, reflecting confidence in sustained long-term demand and an expanding multi-year global campus networking refresh cycle.

Looking ahead, management expects Q4 revenue to range between $16.7 billion and $16.9 billion, with non-GAAP EPS projected between $1.16 and $1.18. For the full year FY2026, Cisco forecasts revenue of $62.8 billion to $63 billion, while non-GAAP EPS is expected to come in between $4.27 and $4.29.

On the other hand, analysts expect Q4 FY2026 EPS to increase 22.2% YOY to $0.99. Over the longer term, estimates call for full-year FY2026 EPS of $3.54, representing 15.3% YOY growth, followed by another 13.3% increase to $4.01 in fiscal 2027.

What Do Analysts Expect for Cisco Stock?

Wall Street maintains a cautiously optimistic stance on Cisco, assigning it an overall rating of “Moderate Buy.” Among 25 analysts covering the stock, 14 rate it a “Strong Buy,” one recommends “Moderate Buy,” and 10 advise investors to “Hold” the stock. 

The average price target of $130.27 implies potential upside of 7.2%. Meanwhile, the Street-High target of $150 points to a possible gain of 23.4% from current levels.

On the date of publication, Aanchal Sugandh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.