Cisco (CSCO) Stock Closed Higher, Bernstein Bullish Following Earnings
NEW YORK (TheStreet) -- Shares of Cisco Systems (CSCO) - Get Report advanced 1.45% to $27.97 in Friday's trading session after Bernstein reiterated an "outperform" rating and $34 price target following the company's most recent quarterly results.
After Wednesday's market close, the communications and network technology company reported 2016 third quarter earnings and revenue that topped analysts' estimates.
Cisco also said that software and cloud-based services drove deferred revenues up 36% and will contribute more than 7% of product revenues, Bernstein pointed out, Barron's reports.
The firm mentioned that its thesis is "beginning to play out," as Cisco's product mix shifts and drives slow margin improvement.
"With positive revenue growth, despite the macro-environment and improving gross margins, the still widely spread idea that Cisco is suffering from today's major technology trends (e.g. Cloud and Software Defined Infrastructure) will appear more and more ill-founded, which should trigger a re-rating of the stock," Bernstein contended.
(Cisco is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of his holding with a free trial.)
Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of A-.
Cisco's strengths such as its solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels, expanding profit margins and good cash flow from operations outweigh the fact that the company has had lackluster performance in the stock itself.
You can view the full analysis from the report here: CSCO
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.
