CSCOCSCO
US • TECHNOLOGY
$114.17
P/E
38.04
PEG
1.03
FCF Yield
2.7%
Rev Growth YoY
+12.0% YoY
Gross Margin
64.3%
Health Score
8/10
D/E Ratio
0.60
Confidence
MEDIUM
Business Snapshot
Cisco Systems is a global leader in networking, cybersecurity, and collaboration technology, generating the majority of its revenue from hardware such as switches and routers, as well as recurring software and services. The company operates in the communication equipment industry, maintaining a dominant position in enterprise networking infrastructure and a growing presence in cloud and security markets. As a large-cap company with a market capitalisation of $444.44B and TTM revenue of $60.75B, Cisco possesses substantial financial scale and market influence. A defining characteristic is its entrenched installed base in enterprise data centres and campuses, which creates significant switching costs for customers and drives a high-margin recurring services business.
Financial Health
Cisco's financial health is robust, supported by a gross margin of 64.3% and a net margin of 19.7%, reflecting strong pricing power and operational efficiency in a hardware-plus-software model. The balance sheet is healthy, with a debt/equity ratio of just 0.6x and a current ratio of 1.0x, indicating the company can comfortably service its obligations while maintaining adequate short-term liquidity...
Risk Assessment
- VALUATION — Cisco’s P/E of 38.04x is substantially above the industry sector average of 22x, making the stock vulnerable to multiple compression if growth disappoints.
- EARNINGS QUALITY — Only 1 out of the last 4 quarterly earnings reports beat analyst estimates, indicating limited positive earnings surprise momentum.
- 52-WEEK POSITION — At $114.17, the current price is below the midpoint of the 52-week range ($97.15) and well below the high of $129.88, suggesting the stock has pulled back meaningfully from its peak.
- TECHNICALS — Price is below the 50-day moving average of $117.33, a short-term bearish signal, though the 200-day MA at $88.15 provides structural support.
- INSIDER ACTIVITY — Over the last 90 days, insiders conducted 6 sells versus 0 buys, a net bearish signal that suggests those closest to the business may view current levels as less attractive....
Cisco's financial health is robust, supported by a gross margin of 64.3% and a net margin of 19.7%, reflecting strong pricing power and operational efficiency in a hardware-plus-software model. The balance sheet is healthy, with a debt/equity ratio of just 0.6x and a current ratio of 1.0x, indicating the company can comfortably service its obligations while maintaining adequate short-term liquidity. Free cash flow is substantial at $11.79B, yielding 2.7%, confirming the business generates significant cash beyond reinvestment needs. This cash generation provides ample capacity for dividends, share buybacks, and strategic investments, reinforcing a low-risk profile for long-term investors.
- VALUATION — Cisco’s P/E of 38.04x is substantially above the industry sector average of 22x, making the stock vulnerable to multiple compression if growth disappoints. - EARNINGS QUALITY — Only 1 out of the last 4 quarterly earnings reports beat analyst estimates, indicating limited positive earnings surprise momentum. - 52-WEEK POSITION — At $114.17, the current price is below the midpoint of the 52-week range ($97.15) and well below the high of $129.88, suggesting the stock has pulled back meaningfully from its peak. - TECHNICALS — Price is below the 50-day moving average of $117.33, a short-term bearish signal, though the 200-day MA at $88.15 provides structural support. - INSIDER ACTIVITY — Over the last 90 days, insiders conducted 6 sells versus 0 buys, a net bearish signal that suggests those closest to the business may view current levels as less attractive.
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