CSCOCSCO
US • TECHNOLOGY
$117.46
P/E
39.14
PEG
1.05
FCF Yield
2.6%
Rev Growth YoY
+12.0% YoY
Gross Margin
64.3%
Health Score
7/10
D/E Ratio
0.60
Confidence
MEDIUM
Business Snapshot
Cisco Systems operates as a multinational technology conglomerate, primarily generating revenue through the design, manufacture, and sale of networking hardware, software, and services. The company competes in the communication equipment industry, holding a position as a dominant player within enterprise networking, cybersecurity, and cloud infrastructure markets. As a large-cap company with a market capitalisation of $448.42B, Cisco reported $60.75B in trailing twelve-month revenue, highlighting its substantial financial scale. A defining characteristic is its entrenched installed base across global enterprise and service provider networks, which creates significant switching costs for customers.
Financial Health
Cisco demonstrates robust profitability with a gross margin of 64.3% and a net margin of 19.7%, reflecting strong pricing power and operational efficiency. The balance sheet is well-capitalised with a debt/equity ratio of just 0.6x and a current ratio of 1.0x, indicating a healthy but not overly liquid short-term position...
Risk Assessment
- VALUATION — P/E of 39.14x is significantly above the sector average of 22x, suggesting the stock is priced for perfection.
- EARNINGS QUALITY — Only 1 out of the last 4 quarters recorded an earnings beat, indicating a potential lack of consistency in exceeding consensus expectations.
- INSIDER SELLING — In the last 90 days, there were 7 insider sells with zero buys, a clear net negative signal that warrants monitoring for a potential sentiment change from those closest to the business.
- VALUATION DIVERGENCE — The current price of $117.46 is well above the Python DCF estimate of $75.56, implying a 55% premium and raising questions about the stock's margin of safety.
- TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed....
Cisco demonstrates robust profitability with a gross margin of 64.3% and a net margin of 19.7%, reflecting strong pricing power and operational efficiency. The balance sheet is well-capitalised with a debt/equity ratio of just 0.6x and a current ratio of 1.0x, indicating a healthy but not overly liquid short-term position. Free cash flow generation is a standout at $11.79B, translating to a FCF yield of 2.6%, confirming the company's ability to produce substantial cash that supports dividends and reinvestment. The return on equity of 25.2% is strong, further underscoring efficient capital management. Overall, Cisco is in a solid financial position, providing a wide margin of safety for debt obligations and ample cash for shareholder returns and strategic investments.
- VALUATION — P/E of 39.14x is significantly above the sector average of 22x, suggesting the stock is priced for perfection. - EARNINGS QUALITY — Only 1 out of the last 4 quarters recorded an earnings beat, indicating a potential lack of consistency in exceeding consensus expectations. - INSIDER SELLING — In the last 90 days, there were 7 insider sells with zero buys, a clear net negative signal that warrants monitoring for a potential sentiment change from those closest to the business. - VALUATION DIVERGENCE — The current price of $117.46 is well above the Python DCF estimate of $75.56, implying a 55% premium and raising questions about the stock's margin of safety. - TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed.
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