Fly Intel: What to watch for in Cisco's earnings report

Cisco (CSCO) is scheduled to report results of its fiscal first quarter after the market close on Wednesday, November 14, with a conference call scheduled for 4:30 pm ET. What to watch for: 1. CONSENSUS UP A TICK: Along with its last report, Cisco guided for Q1 earnings per share in the range of 70c-72c on revenue growth of 5%-7%. At the time, analysts expected the company to report Q1 EPS of 69c on revenue of $12.61B, but those figures have both since risen to 72c and $12.87B, respectively. 2. VENTURE FUND: Early last month, CNBC reported that Cisco had become the principal investor in a $500M venture fund that will be run by Jon Sakoda, managing director of Catalyst Labs Fund I and a former partner at venture firm NEA. According to the report, the fund is focused on making early-stage bets, broadening Cisco's startup investing strategcy which had previously been focused on later-stage companies. 3. DB SEES PATH TO $75 PER SHARE: In mid-October, Deutsche Bank analyst Vijay Bhagavath sent a research note to investors highlighting a "Bull Case View" on Cisco, which presented a "line of sight" to $75 per share. The analyst noted that this represents "60% outperformance potential, based on a fairly modest" assumptions. Bhagavath added that the assumptions include a 16 times enterprise value to free cash flow multiple on his $4.55 fiscal 2021 free cash flow per share scenario. The analyst at the time maintained a Buy rating on Cisco. 4. OPCO SEES IN-LINE QUARTER: Earlier this month, Oppenheimer analyst Ittai Kidron maintained an Outperform rating and $50 price target on Cisco, saying that based on channel checks in the U.S. and Europe, he anticipates an in-line report. The analyst noted that he is "slightly more cautious" on the January quarter, though he still expects the company to meet consensus estimates.