We are raising our fair value estimate for narrow-moat Cisco Systems (CSCO) to $52 per share from $50 after fourth-quarter product order growth accelerated and the transformation to be more recurring in nature continues to gain momentum. Shares are fairly valued, in our view. Fourth-quarter revenue growth of 8% with adjusted earnings of $0.84 came in slightly higher than our expectations, as Cisco executed solid cost control amid a tight supply environment that pressures gross margin. Cisco expects the supply chain to remain a challenge at least through the first half of fiscal 2022, but we believe volume commitments, pricing increases, and concerted operating cost control will steer Cisco through this ephemeral trial. Looking longer-term, we expect this shareholder-centric company to benefit from its transformation to grow its recurring revenue base via software subscriptions and services. This provides Cisco and investors with better insight into the business, allowing management to provide its first ever annual guide for revenue and earnings.
Compared with the prior year, Infrastructure Platforms grew 13%, Applications shrank by 1%, Security expanded by 1%, and Services grew by 3%. Within Infrastructure Platforms, switching, routing, and wireless had double-digit growth while data center shrank. Campus switching, high performance routing, 400Gb switching, and Wi-Fi 6 upgrades drove the strong results, and we expect this strength to continue as organizations update their infrastructure for hybrid work. While WebEx, IoT software, and AppDynamics performed well within Applications, the legacy hardware and on-premises products continue to face headwinds. Security growth was lower than we anticipated, but recurring revenue is expanding from cloud security, Duo, and Umbrella as organizations adopt zero-trust solutions over legacy options. We anticipate its cloud-based security to have strong demand and for the melding of security and networking to favor Cisco long-term.
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