Why Is Cisco (CSCO) Up 2.4% Since Last Earnings Report?

It has been about a month since the last earnings report for Cisco Systems (CSCO). Shares have added about 2.4% in that time frame, outperforming the S&P 500.But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Cisco due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Cisco Systems, Inc. before we dive into how investors and analysts have reacted as of late.Cisco Q1 Earnings Top Estimates, Revenues Up Y/YCisco Systems reported first-quarter fiscal 2026 non-GAAP earnings of $1 per share, beating the Zacks Consensus Estimate by 2.04%. The figure increased 9.9% year over year.Revenues of $14.88 billion surpassed the Zacks Consensus Estimate by 0.71%. The top line increased 7.5% year over year. Total Annual Recurring Revenues (ARR) were $31.4 billion, up 5% with product ARR growth of 7%. Total subscription revenues were $8 billion and represented 54% of Cisco’s total revenues. Total software revenue was up 3% year over year to $5.7 billion.CSCO’s Q1 Top-Line DetailsRevenues from Networking in the first quarter of fiscal 2026 were $7.77 billion, up 15% on a year-over-year basis. Security revenues were $1.98 billion, down 2% year over year. Collaboration revenues were $1.06 billion, down 3% year over year. Observability revenues were $274 million, up 6% year over year.Total Product revenues in the first quarter of fiscal 2026 were $11.08 billion, comprising 74.4% of Cisco’s total revenues. On a year-over-year basis, product revenues increased 9.5%. Service Revenues were $3.81 billion, comprising 25.6% of Cisco’s total revenues and up 2.1% on a year-over-year basis.Region-wise, the Americas’ revenues increased 9% year over year to $8.99 billion. EMEA (Europe, Middle East and Africa) revenues climbed 5% year over year to $3.78 billion. APJC (Asia Pacific Japan China) revenues climbed 5% year over year to $2.11 billion. In the first quarter of fiscal 2026, AI Infrastructure orders from webscale customers exceeded $1.3 billion.CSCO’s Q1 Operating DetailsFirst-quarter fiscal 2026 non-GAAP gross margin was 68.1%, which expanded 120 basis points (bps) year over year. On a non-GAAP basis, the product gross margin decreased 30 bps on a year-over-year basis to 50%. Service gross margin decreased 90 bps to 18.1%.In the first quarter of fiscal 2026, Cisco reported total non-GAAP operating expenses of $5.02 billion, up 3% year over year. As a percentage of revenues, operating expenses declined 150 bps year over year.Consequently, CSCO reported a non-GAAP operating income of $5.12 billion, up 8.4% year over year. Operating margin expanded 30 bps year over year to 34.4%.CSCO’s Balance Sheet DetailsAs of Oct. 25, 2025, cash and cash equivalents and investments totaled $15.7 billion, which decreased from $16.1 billion as of July 26.Total debt was $28.1 billion as of Oct. 25, 2025, compared with $28.1 billion as of July 26.The remaining performance obligations (RPO) at the end of the first quarter of fiscal 2026 were $42.9 billion, up 7%. Product RPO was up 10%, and services RPO was up 4%.In the first quarter of fiscal 2026, CSCO returned $3.6 billion to stockholders through share buybacks ($2 billion) and dividends ($1.6 billion).CSCO Offers Positive GuidanceFor the second quarter of fiscal 2026, Cisco expects non-GAAP earnings between $1.01 per share and $1.03 per share. Revenues are expected to be in the range of $15 billion-$15.2 billion. Non-GAAP gross margins are expected to be between 67.5% and 68.5%. Non-GAAP operating margin is anticipated to be between 33.5% and 34.5%. For fiscal 2026, Cisco expects non-GAAP earnings between $4.08 per share and $4.14 per share. The company expects revenues between $60.2 billion and $61 billion.How Have Estimates Been Moving Since Then?It turns out, fresh estimates have trended upward during the past month.VGM ScoresCurrently, Cisco has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a score of D on the value side, putting it in the bottom 40% for value investors.Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Cisco has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Zacks' Research Chief Picks Stock Most Likely to "At Least Double"Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren’t winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%.See Our Top Stock to Double (Plus 4 Runners Up) >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cisco Systems, Inc. (CSCO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks