“Sales will be better than our estimate—towards the high end of guidance and I think the forecast is good—but is it enough to keep the market excited?”
Several tech companies such as Intel , which have reported better-than-expected earnings, have seen shares drop.
Leopold also expects Cisco’s earnings results to be good and has an “outperform” rating on the firm.
“We have a hard time making the trading call with what to do with the stock over the next 24 to 48 hours, but with a six-month view, we like it,” he said.
In the meantime, Ader said Cisco’s fundamentals are “very strong” and they are currently trading at multiples that are at 5-year lows.
“So if you have some patience, this stock is going to work and the fundamentals are better than they’ve been in a long time,” he said.
“You have large enterprise beginning to spend again—there’s a lot of catchup spending and strategic projects that IT departments have been unwilling to do because of [tight] budgets.”
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William Blair & Co has investment banking clients who own shares of Cisco. The firm is a market maker in the security of Cisco and may have a long or short position.
Leopold does not own any shares of Cisco.