Cisco Systems (CSCO +0.71%) stock jumped 4.5% through 11:40 a.m. ET Thursday morning after beating on both the top and bottom lines in its fiscal Q1 2026 report last night.
Analysts expected Cisco to earn $0.98 per share on $14.8 billion in sales for the quarter, but Cisco actually earned $1 per share (adjusted for one-time items) on sales of $14.9 billion.
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Cisco's Q1 earnings
The news wasn't quite as good as that makes it sound. Cisco grew revenue 8% to beat the sales estimate. But while it beat on adjusted earnings, its earnings as calculated according to generally accepted accounting principles (GAAP) lagged the non-GAAP number -- just $0.72 per share. (This was up 6% year over year, but up less than sales growth.)
CEO Chuck Robbins called the results "a solid start to fiscal 2026," and CFO Mark Patterson said Cisco exceeded its own expectations. Robbins added that Cisco "is on track to deliver our strongest year yet."
For fiscal Q2 2026, management predicts revenue will grow to $15 billion to $15.2 billion, and said non-GAAP earnings will range from $1.01 to $1.03 per share. GAAP profit will again come in much lower, however, somewhere between $0.69 and $0.74 per share, so about flat quarter over quarter.
NASDAQ: CSCO
Key Data Points
Is Cisco stock a buy?
For the full fiscal year, Cisco forecasts $60.2 billion to $61 billion in revenue, $4.08 to $4.14 per share in non-GAAP profit, and $2.87 to $2.98 per share, GAAP.
On Cisco's current $77 stock price, that works out to a P/E ratio of about 26 in a best-case scenario. That's a bit high, however, for a stock growing in the single digits as Cisco is. To me, Cisco stock looks like a sell.
