Cisco Systems (NASDAQ:CSCO) Shares Gap Down – Should You Sell?

Cisco Systems, Inc. (NASDAQ:CSCO) gapped down before the market opened on Thursday . The stock had previously closed at $123.88, but opened at $113.93. Cisco Systems shares last traded at $114.1590, with a volume of 15,389,000 shares traded.

Cisco Systems News Summary

Here are the key news stories impacting Cisco Systems this week:

• Positive Sentiment: AI networking demand is accelerating. Cisco reported $9.3 billion in fiscal 2026 AI infrastructure orders, including $4 billion in the fourth quarter, and expects approximately $7.5 billion of AI infrastructure revenue in fiscal 2027. Networking product orders increased 40% year over year, supporting management’s description of a broader “networking supercycle.” Cisco Q4 Earnings Call Centers on AI Networking Supercycle
• Positive Sentiment: Results and guidance exceeded Wall Street estimates. Fiscal fourth-quarter revenue rose 18% to about $17.3 billion, while non-GAAP EPS of $1.22 surpassed the $1.17 consensus. Cisco forecast fiscal 2027 revenue of $72.2 billion to $73.4 billion and non-GAAP EPS of $5.05 to $5.11, both above analyst expectations. First-quarter revenue and EPS guidance also exceeded consensus. Cisco Reports Fourth Quarter and Fiscal Year 2026 Earnings
• Positive Sentiment: Analysts raised price targets. Wells Fargo, Rosenblatt Securities, KeyCorp, Morgan Stanley and Barclays increased their targets, with ratings ranging from “equal weight” to “buy” or “overweight.”
• Neutral Sentiment: Shareholder returns remain intact. Cisco declared a quarterly dividend of $0.42 per share, payable October 21 to shareholders of record October 2.
• Negative Sentiment: Gross-margin concerns drove the market reaction. Investors worry that supplying large AI infrastructure projects could pressure profitability, while the stock’s premium valuation leaves little room for execution or guidance disappointments. Analysts also noted that strong results and forecasts may not have cleared the market’s unusually high bar for AI-related acceleration. Cisco stock falls on margin concerns

Wall Street Analysts Forecast Growth

CSCO has been the topic of several research reports. Wall Street Zen cut shares of Cisco Systems from a “buy” rating to a “hold” rating in a research report on Tuesday, July 28th. HSBC raised shares of Cisco Systems from a “hold” rating to a “buy” rating and increased their target price for the company from $77.00 to $137.00 in a report on Friday, May 15th. KeyCorp increased their target price on Cisco Systems from $130.00 to $135.00 and gave the company an “overweight” rating in a report on Thursday. CICC Research raised their target price on shares of Cisco Systems from $96.00 to $125.00 and gave the stock an “outperform” rating in a report on Monday, May 18th. Finally, Bank of America boosted their price objective on shares of Cisco Systems from $135.00 to $150.00 and gave the company a “buy” rating in a research report on Monday, June 8th. One research analyst has rated the stock with a Strong Buy rating, sixteen have issued a Buy rating and seven have assigned a Hold rating to the company. According to data from MarketBeat, the stock has a consensus rating of “Moderate Buy” and a consensus price target of $129.95.

Cisco Systems Trading Down 9.1%

The stock has a market cap of $443.79 billion, a PE ratio of 36.59, a PEG ratio of 2.71 and a beta of 1.02. The stock’s fifty day moving average price is $117.56 and its 200 day moving average price is $98.72. The company has a quick ratio of 0.81, a current ratio of 0.92 and a debt-to-equity ratio of 0.40.

Cisco Systems (NASDAQ:CSCO) last issued its earnings results on Wednesday, August 12th. The network equipment provider reported $1.22 EPS for the quarter, beating the consensus estimate of $1.17 by $0.05. The business had revenue of $17.25 billion for the quarter, compared to the consensus estimate of $16.84 billion. Cisco Systems had a return on equity of 28.44% and a net margin of 20.14%.The company’s revenue was up 17.6% compared to the same quarter last year. During the same period last year, the business posted $0.99 EPS. Cisco Systems has set its FY 2027 guidance at 5.050-5.110 EPS and its Q1 2027 guidance at 1.320-1.340 EPS. On average, sell-side analysts forecast that Cisco Systems, Inc. will post 3.54 EPS for the current year.

Cisco Systems Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Wednesday, October 21st. Stockholders of record on Friday, October 2nd will be issued a dividend of $0.42 per share. This represents a $1.68 dividend on an annualized basis and a dividend yield of 1.5%. The ex-dividend date of this dividend is Friday, October 2nd. Cisco Systems’s dividend payout ratio (DPR) is presently 54.55%.

Insider Activity

In other news, EVP Thimaya K. Subaiya sold 7,127 shares of the firm’s stock in a transaction on Tuesday, June 16th. The stock was sold at an average price of $119.91, for a total value of $854,598.57. Following the transaction, the executive vice president directly owned 140,857 shares in the company, valued at $16,890,162.87. This trade represents a 4.82% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Jeetendra I. Patel sold 7,169 shares of the company’s stock in a transaction on Friday, May 15th. The shares were sold at an average price of $117.28, for a total value of $840,780.32. Following the sale, the insider owned 246,737 shares of the company’s stock, valued at approximately $28,937,315.36. This trade represents a 2.82% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 47,650 shares of company stock valued at $5,668,823 over the last three months. Corporate insiders own 0.01% of the company’s stock.

Hedge Funds Weigh In On Cisco Systems

Institutional investors have recently made changes to their positions in the business. World Investment Advisors lifted its stake in shares of Cisco Systems by 15.4% in the 4th quarter. World Investment Advisors now owns 198,549 shares of the network equipment provider’s stock worth $13,905,000 after acquiring an additional 26,455 shares during the period. WCG Wealth Advisors LLC raised its holdings in Cisco Systems by 101.8% during the fourth quarter. WCG Wealth Advisors LLC now owns 107,306 shares of the network equipment provider’s stock worth $8,266,000 after purchasing an additional 54,141 shares in the last quarter. Vise Technologies Inc. lifted its position in Cisco Systems by 47.1% in the fourth quarter. Vise Technologies Inc. now owns 200,341 shares of the network equipment provider’s stock worth $15,432,000 after purchasing an additional 64,144 shares during the period. Western Wealth Management LLC boosted its stake in Cisco Systems by 60.5% during the 1st quarter. Western Wealth Management LLC now owns 76,372 shares of the network equipment provider’s stock valued at $5,926,000 after purchasing an additional 28,792 shares in the last quarter. Finally, Truist Financial Corp boosted its stake in Cisco Systems by 6.8% during the 4th quarter. Truist Financial Corp now owns 4,311,098 shares of the network equipment provider’s stock valued at $332,084,000 after purchasing an additional 275,456 shares in the last quarter. Institutional investors own 73.33% of the company’s stock.

Cisco Systems Company Profile

Cisco Systems, Inc is a global technology company that designs, manufactures and sells networking hardware, software and telecommunications equipment. Its core business focuses on enabling enterprise and service-provider networks through products such as routers, switches, network security appliances and wireless systems. Over time Cisco has broadened its portfolio to emphasize software-defined networking, cybersecurity, cloud infrastructure and edge computing solutions that help organizations build and manage modern IT environments.

In addition to hardware, Cisco offers a growing range of software platforms and subscription services for network management, security, analytics and collaboration.