CISCO SYSTEMS INC (CSCO) Stock Fundamental Analysis
NASDAQ:CSCO - Nasdaq - US17275R1023 - Common Stock
CSCO gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 51 industry peers in the Communications Equipment industry. CSCO scores excellent on profitability, but there are concerns on its financial health. CSCO has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
CSCO had positive earnings in the past year.
CSCO had a positive operating cash flow in the past year.
Each year in the past 5 years CSCO has been profitable.
Each year in the past 5 years CSCO had a positive operating cash flow.
1.2 Ratios
CSCO's Return On Assets of 7.62% is amongst the best of the industry. CSCO outperforms 86.27% of its industry peers.
CSCO has a Return On Equity of 20.75%. This is amongst the best in the industry. CSCO outperforms 92.16% of its industry peers.
CSCO's Return On Invested Capital of 10.24% is amongst the best of the industry. CSCO outperforms 86.27% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CSCO is above the industry average of 11.02%.
The 3 year average ROIC (15.60%) for CSCO is well above the current ROIC(10.24%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.62% | ||
| ROE | 20.75% | ||
| ROIC | 10.24% |
ROA(3y)11.08%
ROA(5y)11.19%
ROE(3y)26.95%
ROE(5y)27.21%
ROIC(3y)15.6%
ROIC(5y)15.96%
1.3 Margins
CSCO's Profit Margin of 17.73% is amongst the best of the industry. CSCO outperforms 94.12% of its industry peers.
CSCO's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 21.95%, CSCO belongs to the top of the industry, outperforming 92.16% of the companies in the same industry.
In the last couple of years the Operating Margin of CSCO has declined.
Looking at the Gross Margin, with a value of 64.92%, CSCO belongs to the top of the industry, outperforming 90.20% of the companies in the same industry.
CSCO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.95% | ||
| PM (TTM) | 17.73% | ||
| GM | 64.92% |
OM growth 3Y-4.32%
OM growth 5Y-2.87%
PM growth 3Y-3.37%
PM growth 5Y-3.05%
GM growth 3Y0.37%
GM growth 5Y0.56%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), CSCO is creating some value.
The number of shares outstanding for CSCO has been reduced compared to 1 year ago.
Compared to 5 years ago, CSCO has less shares outstanding
The debt/assets ratio for CSCO is higher compared to a year ago.
2.2 Solvency
CSCO has an Altman-Z score of 2.55. This is not the best score and indicates that CSCO is in the grey zone with still only limited risk for bankruptcy at the moment.
With a decent Altman-Z score value of 2.55, CSCO is doing good in the industry, outperforming 68.63% of the companies in the same industry.
The Debt to FCF ratio of CSCO is 2.80, which is a good value as it means it would take CSCO, 2.80 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.80, CSCO is in line with its industry, outperforming 58.82% of the companies in the same industry.
CSCO has a Debt/Equity ratio of 0.70. This is a neutral value indicating CSCO is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.70, CSCO is not doing good in the industry: 74.51% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | 2.8 | ||
| Altman-Z | 2.55 |
ROIC/WACC1.07
WACC9.53%
2.3 Liquidity
CSCO has a Current Ratio of 0.88. This is a bad value and indicates that CSCO is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.88, CSCO is doing worse than 94.12% of the companies in the same industry.
A Quick Ratio of 0.80 indicates that CSCO may have some problems paying its short term obligations.
CSCO has a worse Quick ratio (0.80) than 86.27% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.88 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
The earnings per share for CSCO have decreased strongly by -14.53% in the last year.
The Earnings Per Share has been growing slightly by 3.84% on average over the past years.
The Revenue has decreased by -8.72% in the past year.
The Revenue has been growing slightly by 0.72% on average over the past years.
EPS 1Y (TTM)-14.53%
EPS 3Y5.02%
EPS 5Y3.84%
EPS Q2Q%-18.02%
Revenue 1Y (TTM)-8.72%
Revenue growth 3Y2.6%
Revenue growth 5Y0.72%
Sales Q2Q%-5.64%
3.2 Future
The Earnings Per Share is expected to grow by 4.42% on average over the next years.
CSCO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.03% yearly.
EPS Next Y-0.13%
EPS Next 2Y3.82%
EPS Next 3Y5.21%
EPS Next 5Y4.42%
Revenue Next Year4.2%
Revenue Next 2Y4.51%
Revenue Next 3Y4.5%
Revenue Next 5Y4.03%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 17.29, which indicates a rather expensive current valuation of CSCO.
Based on the Price/Earnings ratio, CSCO is valued cheaply inside the industry as 82.35% of the companies are valued more expensively.
CSCO is valuated rather cheaply when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 15.18, CSCO is valued correctly.
72.55% of the companies in the same industry are more expensive than CSCO, based on the Price/Forward Earnings ratio.
CSCO is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.29 | ||
| Fwd PE | 15.18 |
4.2 Price Multiples
70.59% of the companies in the same industry are more expensive than CSCO, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CSCO indicates a somewhat cheap valuation: CSCO is cheaper than 72.55% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.29 | ||
| EV/EBITDA | 15.96 |
4.3 Compensation for Growth
The excellent profitability rating of CSCO may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)4.51
EPS Next 2Y3.82%
EPS Next 3Y5.21%
5. Dividend
5.1 Amount
CSCO has a Yearly Dividend Yield of 2.67%.
Compared to an average industry Dividend Yield of 9.90, CSCO pays a better dividend. On top of this CSCO pays more dividend than 84.31% of the companies listed in the same industry.
CSCO's Dividend Yield is comparable with the S&P500 average which is at 2.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.67% |
5.2 History
The dividend of CSCO has a limited annual growth rate of 3.23%.
CSCO has paid a dividend for at least 10 years, which is a reliable track record.
CSCO has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)3.23%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
CSCO pays out 68.09% of its income as dividend. This is not a sustainable payout ratio.
The dividend of CSCO is growing, but earnings are growing more, so the dividend growth is sustainable.
DP68.09%
EPS Next 2Y3.82%
EPS Next 3Y5.21%
CISCO SYSTEMS INC
NASDAQ:CSCO (1/21/2025, 8:00:00 PM)
After market: 60.97 -0.06 (-0.1%)61.03
+0.8 (+1.33%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners79.53%
Inst Owner Change-0.05%
Ins Owners0.05%
Ins Owner Change4.33%
Market Cap243.07B
Analysts73.75
Price Target63.39 (3.87%)
Short Float %1.36%
Short Ratio2.77
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.67% |
Yearly Dividend1.58
Dividend Growth(5Y)3.23%
DP68.09%
Div Incr Years13
Div Non Decr Years13
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.53%
Min EPS beat(2)0.58%
Max EPS beat(2)2.47%
EPS beat(4)4
Avg EPS beat(4)2.39%
Min EPS beat(4)0.58%
Max EPS beat(4)4.64%
EPS beat(8)8
Avg EPS beat(8)2.81%
EPS beat(12)10
Avg EPS beat(12)1.98%
EPS beat(16)11
Avg EPS beat(16)1.57%
Revenue beat(2)0
Avg Revenue beat(2)-1.33%
Min Revenue beat(2)-1.46%
Max Revenue beat(2)-1.2%
Revenue beat(4)0
Avg Revenue beat(4)-1.15%
Min Revenue beat(4)-1.46%
Max Revenue beat(4)-0.63%
Revenue beat(8)0
Avg Revenue beat(8)-1.09%
Revenue beat(12)2
Avg Revenue beat(12)-1.2%
Revenue beat(16)2
Avg Revenue beat(16)-1.25%
PT rev (1m)0.41%
PT rev (3m)13.56%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.51%
EPS NY rev (1m)0%
EPS NY rev (3m)2.03%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)4.87%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)0.14%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.29 | ||
| Fwd PE | 15.18 | ||
| P/S | 4.59 | ||
| P/FCF | 21.29 | ||
| P/OCF | 19.97 | ||
| P/B | 5.37 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.96 |
EPS(TTM)3.53
EY5.78%
EPS(NY)4.02
Fwd EY6.59%
FCF(TTM)2.87
FCFY4.7%
OCF(TTM)3.06
OCFY5.01%
SpS13.3
BVpS11.37
TBVpS-6.09
PEG (NY)N/A
PEG (5Y)4.51
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.62% | ||
| ROE | 20.75% | ||
| ROCE | 14.05% | ||
| ROIC | 10.24% | ||
| ROICexc | 12.75% | ||
| ROICexgc | 149.75% | ||
| OM | 21.95% | ||
| PM (TTM) | 17.73% | ||
| GM | 64.92% | ||
| FCFM | 21.55% |
ROA(3y)11.08%
ROA(5y)11.19%
ROE(3y)26.95%
ROE(5y)27.21%
ROIC(3y)15.6%
ROIC(5y)15.96%
ROICexc(3y)22.29%
ROICexc(5y)24.14%
ROICexgc(3y)203.21%
ROICexgc(5y)218.11%
ROCE(3y)19.37%
ROCE(5y)19.54%
ROICexcg growth 3Y-12.42%
ROICexcg growth 5Y-32.21%
ROICexc growth 3Y-16.83%
ROICexc growth 5Y-15.54%
OM growth 3Y-4.32%
OM growth 5Y-2.87%
PM growth 3Y-3.37%
PM growth 5Y-3.05%
GM growth 3Y0.37%
GM growth 5Y0.56%
F-Score5
Asset Turnover0.43
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | 2.8 | ||
| Debt/EBITDA | 2.17 | ||
| Cap/Depr | 26.01% | ||
| Cap/Sales | 1.42% | ||
| Interest Coverage | 11.63 | ||
| Cash Conversion | 83.8% | ||
| Profit Quality | 121.55% | ||
| Current Ratio | 0.88 | ||
| Quick Ratio | 0.8 | ||
| Altman-Z | 2.55 |
F-Score5
WACC9.53%
ROIC/WACC1.07
Cap/Depr(3y)33.43%
Cap/Depr(5y)36.01%
Cap/Sales(3y)1.22%
Cap/Sales(5y)1.32%
Profit Quality(3y)119.27%
Profit Quality(5y)125.58%
High Growth Momentum
Growth
EPS 1Y (TTM)-14.53%
EPS 3Y5.02%
EPS 5Y3.84%
EPS Q2Q%-18.02%
EPS Next Y-0.13%
EPS Next 2Y3.82%
EPS Next 3Y5.21%
EPS Next 5Y4.42%
Revenue 1Y (TTM)-8.72%
Revenue growth 3Y2.6%
Revenue growth 5Y0.72%
Sales Q2Q%-5.64%
Revenue Next Year4.2%
Revenue Next 2Y4.51%
Revenue Next 3Y4.5%
Revenue Next 5Y4.03%
EBIT growth 1Y-29.31%
EBIT growth 3Y-1.84%
EBIT growth 5Y-2.17%
EBIT Next Year15.45%
EBIT Next 3Y6.83%
EBIT Next 5YN/A
FCF growth 1Y-13.7%
FCF growth 3Y-11.56%
FCF growth 5Y-7.31%
OCF growth 1Y-11.56%
OCF growth 3Y-11.04%
OCF growth 5Y-7.23%