Why Cisco Systems Stock Is Falling Today

Cisco Systems Inc (NASDAQ: CSCO) shares are trading lower Thursday after the company reported worse-than-expected top-line results and issued guidance below analyst estimates.

Cisco said first-quarter revenue totaled $12.8 billion, which was flat on a year-over-year basis and missed the $13.34-billion estimate, according to data from Benzinga Pro. The company reported quarterly adjusted earnings of 87 cents per share, which beat the estimate of 86 cents per share.

"While Covid lockdowns in China and the war in Ukraine impacted our revenue in the quarter, the fundamental drivers across our business are strong and we remain confident in the long term," said Chuck Robbins, chair and CEO of Cisco.

Cisco said it expects fourth-quarter revenue to decline 1% to 5.5% year-over-year. The company expects fourth-quarter adjusted earnings to be between 76 cents and 84 cents per share versus the estimate of 92 cents per share.

Cisco sees full-year revenue growth between 2% and 3% compared to the prior year. The company expects full-year adjusted earnings to be in a range of $3.29 to $3.37 per share versus the estimate of $3.44 per share. 

Analyst Assessment: 

• Piper Sandler maintained Cisco with a Neutral rating and lowered the price target from $57 to $43.
• Credit Suisse maintained Cisco with an Outperform rating and lowered the price target from $72 to $60.
• UBS maintained Cisco with a Neutral rating and lowered the price target from $59 to $46.
• JPMorgan maintained Cisco with an Overweight rating and lowered the price target from $67 to $62.
• Morgan Stanley maintained Cisco with an Equal-Weight rating and lowered the price target from $59 to $46.

CSCO Price Action: Cisco is making new 52-week lows on Thursday.

The stock was down 11.6% at $42.80 at press time.

Photo: courtesy of Cisco.