Cisco (CSCO) Subscription Transition Underscored Revenue Opportunity - Wells Fargo
- Wall Street flat, IBM results weigh on technology stocks
- Tesla (TSLA) Beats EPS and Revenue Views on Improving Gross Margins, Analysts Praise Very Solid Quarter But Warn of 'Aggressive Valuation' as Stock 'Priced to Perfection'
- Trump Media To Go Public Via $1.7 Billion SPAC Deal, Aims to Fight the Big Tech
- IBM (IBM) Stock Plunges 5% on Sales Miss, Q3 Results Seen as a Setback
- Oil hits multi-year high above $86, then pulls back
News and research before you hear about it on CNBC and others. Claim your 1-week free trial to StreetInsider Premium here.
Wells Fargo analyst Aaron Rakers reiterated an Overweight rating and $70.00 price target on Cisco (NASDAQ: CSCO) after attending the company's first Investor Day since 2017 on 9/15. The analyst walked away positive on the Signature Pick name on the belief that the company's presentations / comments reinforced his positive thesis.
The analyst stated "Cisco's presentations emphasized the company's transition to expanding subscription software revenue contributions—incrementally noting that it now sees ~29% of their total Infrastructure Products revenue via software with two-thirds of this derived from subscription (vs. a total 14%software rev. contribution in F2017). Total subscription revenue totaled ~$11.9B inF2021, representing a F2015-F2021 CAGR at +23%. Combined with maintenance, Cisco generated ~44% of total revenue via subscription software + maintenance, which is expected to expand to >50% of total revenue by F2025. Subscription software revenue is implied to expand from ~33% of total product rev. in F2021 to ~45% by F2025. Cisco incrementally provided an ARR metric—$22.3B exiting F2021, which represents a+11% CAGR since F2019. Cisco's presentations outlined a focus on driving increasing EA traction; one presentation noting that EAs have on average seen a 35% higher spend w/in12-months vs. pre-EA spend levels."
Shares of Cisco closed at $57.56 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Cisco Systems (CSCO) Announces Change In Product Categories And ARR Update
- Osisko Gold Royalties Ltd (OR:CN) (OR) PT Lowered to Cdn$23 at Canaccord Genuity
- Kinross Gold (K:CN) (KGC) PT Lowered to Cdn$11 at Canaccord Genuity
Create E-mail Alert Related CategoriesAnalyst Comments
Related EntitiesWells Fargo
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!