Cisco Systems (CSCO) shares have pulled back rather significantly in recent months, but the options market believes some near-term recovery is likely after the company reports earnings on Nov. 12. Consensus is for the company to report $1.15 in earnings per share (EPS) for its first financial quarter, which would represent 42% growth on a year-over-year basis.
Despite recent declines, Cisco stock remains up about 30% versus the start of this year.
Options Sentiment Remains Bullish for Cisco Stock
Traders are betting increasingly on the bullish call options rather than the bearish put options ahead of Cisco’s first-quarter earnings on Thursday. In fact, the put-to-call ratio on options contracts expiring Nov. 20 sits at 0.41x as of this writing, signaling a meaningfully strong bullish skew. A reading below 1.00x is typically interpreted as constructive.
Crucially, Barchart’s data pegs the upper price on those contracts at nearly $106, suggesting CSCO shares could rally as much as 8.65% through the end of next week.
The Nasdaq-listed firm also pays a dividend yield of 1.71%, which makes it even more attractive as a long-term holding.
Are CSCO Shares Worth Owning for the Long Term?
Cisco's broader transformation into an AI infrastructure and cybersecurity leader continues to bolster the bull case. The giant has been aggressively integrating Splunk into its portfolio and deepening its partnership with Nvidia (NVDA), aimed at helping enterprises deploy and secure AI workloads at scale.
Earlier this month, CSCO unveiled new AI security and observability capabilities, positioning itself to benefit from growing enterprise demand for trusted AI deployment and governance. Meanwhile, the firm’s recurring software and services revenue mix continues to increase, reducing its reliance on cyclical networking hardware sales as well.
Also note that Cisco has a history of closing both November and December in the green, a seasonal trend that further improves its near-term appeal.
How Wall Street Recommends Playing Cisco Systems?
Wall Street analysts are also convinced that CSCO stock has more room to the upside. The consensus rating on Cisco Systems remains at “Moderate Buy,” with the mean price target of about $133 indicating potential upside of more than 30% from here.
On the date of publication, Wajeeh Khan did not directly have a position in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.