Cisco shares down despite upbeat guidance, better-than-expected Q1 results

Investing.com -- Cisco issued upbeat second-quarter guidance and raised its annual outlook following fiscal first-quarter results that topped Wall Street estimates.

Still, Cisco Systems Inc (NASDAQ:CSCO ) fell 4% in premarket trading Thursday after the report.

Cisco announced Q1 adjusted EPS of $0.91 on revenue of $13.8 billion. Analysts polled by Investing.com anticipated EPS of $0.87 on revenue of $13.78B.

"Cisco is off to a strong start to fiscal 2025," said Chuck Robbins, chair and CEO of Cisco. "Our customers are investing in critical infrastructure to prepare for AI, and with the breadth of our portfolio, we are uniquely positioned to capitalize on this opportunity."

Looking to fiscal Q2, Cisco projects EPS between $0.89 and $0.91, surpassing the consensus estimate of $0.87. The company expects Q2 revenue to range from $13.75 billion to $13.95 billion, also above the consensus forecast of $13.73 billion.

The company sees 2025 full-year adjusted EPS of $3.60 to $3.66 on revenue in a range of $55.3B to $56.3B, compared with its earlier forecasts of between $3.52 and $3.58 for EPS and $55.0 billion to $56.2 billion for revenue. Analyst estimates stood at $3.58 and $55.9 billion, respectively.

Bank of America analysts said the revenue guidance hike was mainly attributable to better-than-expected Q1 results and Q2 outlook, "and we see room for growth acceleration in 2H25 on the back of the strong Cloud/AI and Security order growth."

The bank raised its price target on CSCO shares from $60 to $72.

Jefferies analysts also raised their target price on Cisco stock from $53 to $66, citing "solid results and guidance bolstered by depleted customer inventory and positive AI commentary."

"We still think the risk/reward in the shares is tilted positively," they noted.

Yasin Ebrahim contributed to this report.

Source: Investing.com