CISCO SYSTEMS INC (CSCO)
US17275R1023 - Common Stock
We assign a fundamental rating of 5 out of 10 to CSCO. CSCO was compared to 51 industry peers in the Communications Equipment industry. CSCO scores excellent on profitability, but there are concerns on its financial health. CSCO has a decent growth rate and is not valued too expensively. Finally CSCO also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
CSCO had positive earnings in the past year.
In the past year CSCO had a positive cash flow from operations.
In the past 5 years CSCO has always been profitable.
In the past 5 years CSCO always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.62%, CSCO belongs to the top of the industry, outperforming 88.24% of the companies in the same industry.
The Return On Equity of CSCO (20.75%) is better than 92.16% of its industry peers.
Looking at the Return On Invested Capital, with a value of 11.70%, CSCO belongs to the top of the industry, outperforming 88.24% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for CSCO is significantly above the industry average of 10.06%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.62% | ||
| ROE | 20.75% | ||
| ROIC | 11.7% |
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
Looking at the Profit Margin, with a value of 17.73%, CSCO belongs to the top of the industry, outperforming 94.12% of the companies in the same industry.
In the last couple of years the Profit Margin of CSCO has declined.
With an excellent Operating Margin value of 21.93%, CSCO belongs to the best of the industry, outperforming 92.16% of the companies in the same industry.
CSCO's Operating Margin has declined in the last couple of years.
CSCO has a Gross Margin of 64.92%. This is amongst the best in the industry. CSCO outperforms 90.20% of its industry peers.
In the last couple of years the Gross Margin of CSCO has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.93% | ||
| 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.
CSCO has less shares outstanding than it did 1 year ago.
The number of shares outstanding for CSCO has been reduced compared to 5 years ago.
The debt/assets ratio for CSCO is higher compared to a year ago.
2.2 Solvency
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.
With a decent Debt to FCF ratio value of 2.80, CSCO is doing good in the industry, outperforming 60.78% of the companies in the same industry.
CSCO has a Debt/Equity ratio of 0.43. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of CSCO (0.43) is worse than 62.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | 2.8 | ||
| Altman-Z | N/A |
ROIC/WACC1.27
WACC9.19%
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.
CSCO's Current ratio of 0.88 is on the low side compared to the rest of the industry. CSCO is outperformed by 92.16% of its industry peers.
A Quick Ratio of 0.80 indicates that CSCO may have some problems paying its short term obligations.
CSCO has a Quick ratio of 0.80. This is amonst the worse of the industry: CSCO underperforms 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.
CSCO shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 3.84% yearly.
CSCO shows a decrease in Revenue. In the last year, the revenue decreased by -8.72%.
Measured over the past years, CSCO shows a small growth in Revenue. The Revenue has been growing by 0.72% on average per year.
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
Based on estimates for the next years, CSCO will show a small growth in Earnings Per Share. The EPS will grow by 5.50% on average per year.
The Revenue is expected to grow by 4.72% on average over the next years.
EPS Next Y-1.98%
EPS Next 2Y3.24%
EPS Next 3Y4.83%
EPS Next 5Y5.5%
Revenue Next Year4.08%
Revenue Next 2Y4.31%
Revenue Next 3Y4.28%
Revenue Next 5Y4.72%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 16.24, the valuation of CSCO can be described as correct.
Based on the Price/Earnings ratio, CSCO is valued cheaper than 80.39% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.65. CSCO is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 14.42, which indicates a correct valuation of CSCO.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CSCO indicates a somewhat cheap valuation: CSCO is cheaper than 72.55% of the companies listed in the same industry.
CSCO is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.50, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.24 | ||
| Fwd PE | 14.42 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CSCO is valued a bit cheaper than 72.55% of the companies in the same industry.
CSCO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. CSCO is cheaper than 74.51% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.01 | ||
| EV/EBITDA | 16.04 |
4.3 Compensation for Growth
The excellent profitability rating of CSCO may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)4.23
EPS Next 2Y3.24%
EPS Next 3Y4.83%
5. Dividend
5.1 Amount
CSCO has a Yearly Dividend Yield of 2.78%.
CSCO's Dividend Yield is rather good when compared to the industry average which is at 11.44. CSCO pays more dividend than 84.31% of the companies in the same industry.
CSCO's Dividend Yield is a higher than the S&P500 average which is at 2.22.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.78% |
5.2 History
The dividend of CSCO has a limited annual growth rate of 3.23%.
CSCO has been paying a dividend for at least 10 years, so it has a reliable track record.
CSCO has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)3.23%
Div Incr Years12
Div Non Decr Years12
5.3 Sustainability
68.09% of the earnings are spent on dividend by CSCO. This is not a sustainable payout ratio.
CSCO's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP68.09%
EPS Next 2Y3.24%
EPS Next 3Y4.83%
CISCO SYSTEMS INC
NASDAQ:CSCO (11/18/2024, 8:00:00 PM)
After market: 57.31 0 (0%)57.31
-0.15 (-0.26%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap228.44B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.78% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
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Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.24 | ||
| Fwd PE | 14.42 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)4.23
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.62% | ||
| ROE | 20.75% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 21.93% | ||
| PM (TTM) | 17.73% | ||
| GM | 64.92% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.43
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.88 | ||
| Quick Ratio | 0.8 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)-14.53%
EPS 3Y5.02%
EPS 5Y
EPS Q2Q%
EPS Next Y-1.98%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-8.72%
Revenue growth 3Y2.6%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y