JMP analyst Erik Suppiger is out with a research report on Cisco Systems, Inc. (NASDAQ:CSCO) after hosting an investor meeting with vice president and chief technology officer of Cisco’s Security Group at headquarters in San Jose, California.

On back of the meeting and the analyst’s resulting takeaways, Suppiger reiterates a Market Perform rating on shares of CSCO without listing a price target.

First, Suppiger highlights a shift from the networking giant to consolidated purchasing and platform sales, which the analyst believes act as a spending driver to ramp up software services rather than the old direction of hardware sales.

Second, Suppiger sees CSCO amid a “major refresh cycle” occurring among the giant’s over 200,000 ASA firewall customers. From the analyst’s perspective, this offers a window for next-generation firewall vendors to acquire shares.

Third, Suppiger notes, “Our discussion gave us greater confidence that Cisco will continue to acquire in the security space and we believe Imperva […] represents an attractive candidate.”

The analyst now has “increased comfort that the shift towards subscription services is a trend which is impacting the broader security market,” which indicates that vendors like Palo Alto Networks revealing slowed product growth are a reflection of this trend rather than a consequence of share losses.

Ultimately, “While we believe this presents an opportunity for Cisco to drive growth and upsell software/services, our checks reveal that the refresh cycle is a natural time to evaluate competitive solutions, presenting a compelling opportunity for competitors, including Palo Alto and Fortinet. Lastly, Mr. Hartman indicated security expertise remains very scarce and we believe Cisco will continue to use M&A as a vehicle to add talent,” Suppiger concludes.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, five-star analyst Erik Suppiger is ranked #388 out of 4,193 analysts. Suppiger has a 66% success rating and earns 12.4% in his annual returns. However, when recommending CSCO, Suppiger faces a loss of 20.2% in average profits on the stock.

TipRanks analytics exhibit CSCO as a Buy. Based on 27 analysts polled in the last 3 months, 17 rate a Buy on CSCO, 9 maintain a Hold, while 1 issues a Sell. The 12-month price target stands at $33.46, marking a nearly 7% upside from where the shares last closed.