RBC Capital analyst Mitch Steves provides insight on shares of Cisco Systems, Inc. (NASDAQ:CSCO) on the heels of holding meetings with investors and CSCO leaders, Bret Hartman, VP and CTO of Security Business Group, and Marty Palka, head of Investors Relations.

Following the meetings, Steves notes he has come away “positive on the Company’s long-term security strategy,” and therefore reiterates an Outperform rating on CSCO with a price target of $35, which represents an 11% increase from where the shares last closed.

Specifically, the analyst highlights four takeaways. First, management has indicated the tech giant continues its search for acquisition targets, and from Steves’ viewpoint, CSCO has the benefit of being able to search for any deal size it likes.

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Second, Cisco underscored an addition of 6,000 customers to its security threat segment of its business that has reached considerable development progress.

Third, now that threat capabilities have significantly developed this past quarter, the company next intends to focus its risk management on its private and public cloud policies.

Fourth, a lot of hopes rest upon ContainerX, a new multitenant, container-as-a-service platform for both Linux and Windows. Cisco believe this could be “a new opportunity to develop applications on containers and from a security perspective, this could disrupt the hypervisor market.”

Ultimately, “we remain positive on Cisco’s Security segment and reiterate our belief that revenue will continue to shift towards recurring models (Security now ~50% software revenue and should become a greater portion over time),” Steves concludes.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, three-star analyst Mitch Steves is ranked #1,463 out of 4,129 analysts. Steves has a 74% success rate and realizes 4.1% in his annual returns. When recommending CSCO, Steves earns 5.2% in average profits on the stock.

TipRanks analytics exhibit CSCO as a Buy. Based on 25 analysts, 16 rate a Buy on CSCO, 8 maintain a Hold, while 1 issues a Sell. The 12-month average price target stands at $32.90, marking a nearly 5% upside from where the stock is currently trading.Screen Shot 09-01-16 at 12.57 PM