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Should You Buy Cisco Systems (CSCO) Ahead of Earnings?
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Investors are always looking for stocks that are poised to beat at earnings season and Cisco Systems, Inc. (CSCO - Free Report) may be one such company. The firm has earnings coming up pretty soon, and events are shaping up quite nicely for their report.
That is because Cisco Systems is seeing favorable earnings estimate revision activity as of late, which is generally a precursor to an earnings beat. After all, analysts raising estimates right before earnings — with the most up-to-date information possible — is a pretty good indicator of some favorable trends underneath the surface for CSCO in this report.
In fact, the Most Accurate Estimate for the current quarter is currently higher than the broader Zacks Consensus Estimate of 82 cents per share. This suggests that analysts have very recently bumped up their estimates for CSCO, giving the stock a Zacks Earnings ESP of +0.41% heading into earnings season.
A positive reading for the Zacks Earnings ESP has proven to be very powerful in producing both positive surprises, and outperforming the market. Our recent 10-year backtest shows that stocks that have a positive Earnings ESP and a Zacks Rank #3 (Hold) or better show a positive surprise nearly 70% of the time, and have returned over 28% on average in annual returns (see more Top Earnings ESP stocks here).
Clearly, recent earnings estimate revisions suggest that good things are ahead for Cisco Systems, and that a beat might be in the cards for the upcoming report.
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This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
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Should You Buy Cisco Systems (CSCO) Ahead of Earnings?
Investors are always looking for stocks that are poised to beat at earnings season and Cisco Systems, Inc. (CSCO - Free Report) may be one such company. The firm has earnings coming up pretty soon, and events are shaping up quite nicely for their report.
That is because Cisco Systems is seeing favorable earnings estimate revision activity as of late, which is generally a precursor to an earnings beat. After all, analysts raising estimates right before earnings — with the most up-to-date information possible — is a pretty good indicator of some favorable trends underneath the surface for CSCO in this report.
In fact, the Most Accurate Estimate for the current quarter is currently higher than the broader Zacks Consensus Estimate of 82 cents per share. This suggests that analysts have very recently bumped up their estimates for CSCO, giving the stock a Zacks Earnings ESP of +0.41% heading into earnings season.
Cisco Systems, Inc. Price and EPS Surprise
Cisco Systems, Inc. price-eps-surprise | Cisco Systems, Inc. Quote
Why is this Important?
A positive reading for the Zacks Earnings ESP has proven to be very powerful in producing both positive surprises, and outperforming the market. Our recent 10-year backtest shows that stocks that have a positive Earnings ESP and a Zacks Rank #3 (Hold) or better show a positive surprise nearly 70% of the time, and have returned over 28% on average in annual returns (see more Top Earnings ESP stocks here).
Given that CSCO has a Zacks Rank #3 (Hold) and an ESP in positive territory, investors might want to consider this stock ahead of earnings. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Clearly, recent earnings estimate revisions suggest that good things are ahead for Cisco Systems, and that a beat might be in the cards for the upcoming report.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>