Cisco Systems Inc. (NASDAQ: CSCO) is set to report earnings on Wednesday, February 12, after the close of trading. Investors have been burned here, and this could be a make or break quarter after its spoiler report last quarter.

On the surface it seems as though the bar has been set low for the networking and communications equipment giant. The problem is that China and emerging markets remain a challenge, both from retaliation of order blocking by the United States and from the NSA Snowden scandal bringing up espionage and security concerns.

The consensus forecast from Thomson Reuters calls for $0.46 in earnings per share and $11.03 billion in revenue. Estimates for the quarter ahead are $0.48 in earnings per share and $11.34 billion in revenue.

To show how weak this quarterly report is expected to be, the revenue drop is expected to be almost 9% for the quarter. The $0.46 in earnings per share expected compares with $0.51 per share a year ago.

If Cisco has another weak report and cannot even make the estimate for a 7% drop in revenue in the coming quarter, then we seriously worry that investors could drag Cisco to under $20 again. That being said, Cisco’s stock was up close to 2% so far in 2014 over the weekend, and the stock was up 0.7% at $22.83 in mid-Monday trading. Cisco also has that high 3% dividend yield.

Trading at $22.83, it has a 52-week range of $19.98 to $26.49. The valuation is roughly 11.5 times expected forward annual earnings. Cisco’s consensus price target is down to $23.46, but it was closer to $26 before its last earnings debacle.

Cisco’s short interest remains elevated at 59.7 million shares as of the January 15 settlement day. That is not a recent high in short seller activity, but it remains higher than the average.

J.P. Morgan downgraded Cisco to Underweight from an already cautious Neutral rating on January 21, and the price target was downgraded from an already low $21 to $17 for the stock. The lowest analyst target price is $16 for Cisco.

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