It's been a pretty great week for Cisco Systems, Inc. (NASDAQ:CSCO) shareholders, with its shares surging 10% to US$41.40 in the week since its latest quarterly results. Cisco Systems reported in line with analyst predictions, delivering revenues of US$12b and statutory earnings per share of US$0.51, suggesting the business is executing well and in line with its plan. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following last week's earnings report, Cisco Systems' 22 analysts are forecasting 2021 revenues to be US$48.6b, approximately in line with the last 12 months. Statutory per share are forecast to be US$2.44, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$48.3b and earnings per share (EPS) of US$2.49 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$49.14. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Cisco Systems analyst has a price target of US$65.00 per share, while the most pessimistic values it at US$36.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Cisco Systems shareholders.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Cisco Systems' growth to accelerate, with the forecast 1.2% growth ranking favourably alongside historical growth of 0.7% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.3% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Cisco Systems is expected to grow slower than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Cisco Systems' revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$49.14, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Cisco Systems going out to 2025, and you can see them free on our platform here..
We also provide an overview of the Cisco Systems Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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