Cisco's Q1: What Was Bullish, What Was Bearish - Cisco Systems (NASDAQ:CSCO)

Cisco Systems, Inc. CSCO's fiscal first quarter earnings marked an end to an eight-quarter streak of revenue decline.

KeyBanc Capital Markets' Alex Kurtz maintains an Overweight rating on Cisco's stock with a price target boosted from $33 to $39.

Kurtz highlighted four aspects of Cisco's earnings that he said confirm a bullish stance on the company. (See Kurtz' track record here.)

The overall macro tone was "stable."
Deferred product revenue from recurring sources rose 37 percent from a year ago, showing momentum in the software model (such as AppDynamics) and Cisco ONE bundle and subscriptions.
Catalyst 9K upgrades are "trending toward the higher content advanced bundle" in bookings data.
The ACI/Data Center segments is seeing growth with the webscale market highlighted.

Bears have two key points that support the other side of the trade, Kurtz said:

A 5-percent decline year-over-year in enterprise orders, as the new campus architecture delayed decisions.
Management's commentary relating to edge routing implies a potential headwind ahead, as customers could be taking a more drastic cut to their ISR spending with SD-WAN capabilities in the market.

Shares of Cisco were trading higher by more than 6 percent early Thursday morning at $36.43, above the stock's 52-week high of $34.75.