Cisco Systems CSCO is expanding its security portfolio with the launch of a new security service edge (SSE) solution that provides an efficient hybrid working environment and simplifies access across any location, device and application.
Cisco’s new SSE solution — Cisco Secure Access — offers frictionless access to all applications to enable hybrid work in a secure environment. The solution simplifies security operations by converging multiple functions into one easy-to-use solution that protects all traffic. It helps in efficiency gains and cost reductions, as well as makes the IT environment more flexible.
Moreover, Cisco Secure Access features faster detection and response capabilities and is supported by Cisco Talos AI-driven threat intelligence to detect and block more threats.
Cisco is collaborating with leading mobile device vendors to create the safest and best user experience. It is partnering with Apple AAPL to incorporate Zero Trust Access capabilities powered by Cisco Secure Access into a native experience on iOS and macOS.
Later this year, Apple’s iPhone, iPad, and Mac devices will have native support for network relays.
Cisco Systems, Inc. Price and Consensus
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Moreover, Cisco Secure Access is leveraging capabilities from the rest of the company’s security and networking portfolio, including embedded network visibility from Cisco ThousandEyes, and can be easily integrated with solutions from third-party vendors.
Cisco Secure Access will be available in a limited way beginning July 2023 and will be generally available in October 2023.
Cisco Progressing to Offer AI-Driven Security Cloud
The company is steadily progressing toward its goal of offering an AI-driven security cloud that will help users face an increasingly sophisticated threat environment.
Cisco Security Cloud will use a generative AI-powered Policy Assistant that will help IT and security administrators set policies easily and implement them. The solution, which will be available later this year, will use customers’ existing rule sets in Cisco Secure Firewall Management Center to drive improved efficiency without sacrificing control.
Moreover, Cisco’s Security Operations Center Assistant can detect and respond to threats faster. Cisco is set to launch the event summarization feature by the end of 2023 with the remaining capabilities to be available in the first half of 2024.
As part of its initiatives for an AI-driven Security Cloud, the company launched a new Extended Detection and Response solution that simplifies security operations in the current hybrid, multi-vendor, multi-threat landscape.
Moreover, Cisco started offering advanced features in all editions of Duo to protect against multi-factor authentication attacks.
Adoption of Security Solutions to Aid Cisco’s Prospects
Cisco shares have outperformed the Zacks Computer-Networking industry year to date but underperformed the broader Zacks Computer & Technology sector. While this Zacks Rank #3 (Hold) company returned 4.6%, the industry rose 4% and the sector gained 33.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is riding on the growing demand for its security products. In the fiscal third quarter, End-to-End Security revenues were up 2% year over year to $958 million, driven by strong adoption of ThousandEyes and Duo.
Cisco’s security portfolio benefited from the launch of new data loss prevention, firewall and Zero Trust capabilities. Zero Trust portfolio continued to perform well, driven by strong performance in its Duo offering. Optimized application experiences were up 7%, driven by double-digit growth in Cisco’s SaaS-based offering, ThousandEyes.
The company’s expanding security portfolio and introduction of AI-driven features are expected to drive top-line growth.
For fourth-quarter fiscal 2023, revenues are expected to grow between 14% and 16% on a year-over-year basis. Earnings are anticipated between $1.05 and $1.07 per share.
The Zacks Consensus Estimate for earnings stands at $1.06 per share, up a couple of cents over the past 30 days. The consensus mark for revenues is pegged at $15.05 billion, indicating 14.84% year-over-year growth.
Stocks to Consider
Meta Platforms META and NetScout NTCT are some better-ranked stocks in the broader sector. Both sport a Zacks Rank #1 (Strong Buy).
Long-term earnings growth rate for Meta and NetScout is pegged at 21.93% and 5%, respectively.
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