Cisco Systems (CSCO) Stock Price Forecast 2025: Strong Earnings Expected to Boost Shares

Dow Jones component Cisco Systems, Inc. (CSCO) is set to release its fiscal fourth-quarter 2024 earnings after Wednesday's market close. Analysts anticipate earnings of approximately $0.74 per share on revenues near $12.1 billion. Following a robust performance in May, when Cisco surpassed third-quarter estimates and raised guidance for Q4, its shares surged over 4%, climbing above $48. Although the stock experienced a pullback, it quickly rebounded and may reach new highs post-earnings announcement.

Key Insights

• Cisco is strategically positioned to extend its share price gains following the earnings release.
• Despite recent gains, the stock remains significantly below its 2000 internet bubble peak.
• Regulatory delays in China could impact Cisco's planned acquisition of Acacia Communications due to geopolitical tensions.

The Chinese State Administration for Market Regulation has yet to approve Cisco's acquisition of Acacia Communications, announced over a year ago. Given Cisco's substantial dealings with Huawei—a company currently under scrutiny in the U.S. for espionage allegations—this delay may reflect broader political challenges. Originally, Cisco anticipated closing the deal by the end of 2019, so the prolonged approval process is noteworthy.

Wall Street consensus rates Cisco as a "Moderate Buy," supported by 11 "Buy" and 8 "Hold" recommendations, with no current sell ratings. Price targets vary from $41 to a high of $67, while the stock is trading roughly $3 below the median $50 target. This suggests potential upside if Cisco meets or exceeds earnings expectations this week.

Understanding Mergers

A merger combines two companies into a single entity, often to expand market reach, enter new sectors, or increase market share, ultimately aiming to enhance shareholder value.

Cisco Systems Long-Term Stock Performance (1990–2024)

Throughout the 1990s, Cisco's stock split eight times during a significant rise, peaking at $82 in 2000 before the dot-com bubble burst caused a 90% decline by 2002. Subsequent recovery attempts in 2004 and 2008 faced resistance, with the stock hitting a six-year low after the 2008 financial crisis. The rally into 2019 reached $58.26 but failed to sustain momentum in early 2020 amid global market turmoil. The ongoing correction since then indicates cautious investor sentiment.

Market Correction Explained

A correction is defined as a price drop of 10% or more from a recent peak, affecting individual stocks or broader market indices.

Cisco Systems Short-Term Stock Trends (2018–2024)

The on-balance volume (OBV) indicator peaked ahead of price in mid-2019 and declined through September, signaling distribution. OBV and price formed lower highs in early 2020 before dropping to a 14-month low. Since then, buying pressure has recovered approximately 75% of the decline, mirroring price action. This neutral sentiment suggests no strong directional bias currently.

Price has formed a symmetrical triangle pattern since June, typically bullish when following a strong buying wave. Despite recent price stagnation, investor interest remains intact, potentially setting the stage for a rally to fill the February 13 gap and push shares into the low $50s, where resistance from a double top could emerge.

Conclusion

Cisco Systems is poised for potential gains following its upcoming earnings report, though resistance near the low $50 range may temper upside momentum. Investors should watch for confirmation of earnings strength and monitor geopolitical developments impacting acquisitions.

Disclosure: The author holds no positions in Cisco Systems at the time of writing.

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