CISCO SYSTEMS INC (CSCO)
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. While CSCO has a great profitability rating, there are quite some concerns on its financial health. CSCO is valued correctly, but it does not seem to be growing.
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.
Each year in the past 5 years CSCO has been profitable.
CSCO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 7.62%, CSCO belongs to the best of the industry, outperforming 86.27% of the companies in the same industry.
CSCO has a better Return On Equity (20.75%) than 92.16% of its industry peers.
CSCO has a better Return On Invested Capital (10.24%) than 86.27% of its industry peers.
The Average Return On Invested Capital over the past 3 years 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 has a Profit Margin of 17.73%. This is amongst the best in the industry. CSCO outperforms 94.12% of its industry peers.
In the last couple of years the Profit Margin of CSCO has declined.
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.
The Gross Margin of CSCO (64.92%) is better than 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 | 21.95% | ||
| 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so CSCO is still creating some value.
Compared to 1 year ago, CSCO has less shares outstanding
Compared to 5 years ago, CSCO has less shares outstanding
CSCO has a worse debt/assets ratio than last year.
2.2 Solvency
CSCO has an Altman-Z score of 2.47. 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.
CSCO's Altman-Z score of 2.47 is fine compared to the rest of the industry. CSCO outperforms 68.63% of its industry peers.
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.
CSCO's Debt to FCF ratio of 2.80 is in line compared to the rest of the industry. CSCO outperforms 58.82% of its industry peers.
A Debt/Equity ratio of 0.70 indicates that CSCO is somewhat dependend on debt financing.
CSCO has a Debt to Equity ratio of 0.70. This is in the lower half of the industry: CSCO underperforms 74.51% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | 2.8 | ||
| Altman-Z | 2.47 |
ROIC/WACC1.07
WACC9.57%
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 has a Current ratio of 0.88. This is amonst the worse of the industry: CSCO underperforms 94.12% 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 worse Quick ratio (0.80) than 88.24% 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.
Measured over the past 5 years, CSCO shows a small growth in Earnings Per Share. The EPS has been growing by 3.84% on average per year.
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
CSCO is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.42% yearly.
The Revenue is expected to grow by 4.03% on average over the next years.
EPS Next Y-0.13%
EPS Next 2Y3.82%
EPS Next 3Y5.14%
EPS Next 5Y4.42%
Revenue Next Year4.17%
Revenue Next 2Y4.47%
Revenue Next 3Y4.47%
Revenue Next 5Y4.03%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
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
CSCO is valuated correctly with a Price/Earnings ratio of 16.58.
Based on the Price/Earnings ratio, CSCO is valued cheaply inside the industry as 80.39% of the companies are valued more expensively.
CSCO's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.73.
A Price/Forward Earnings ratio of 14.56 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 74.51% of the companies listed in the same industry.
CSCO is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.83, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.58 | ||
| Fwd PE | 14.56 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CSCO indicates a somewhat cheap valuation: CSCO is cheaper than 72.55% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, CSCO is valued a bit cheaper than the industry average as 72.55% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.41 | ||
| EV/EBITDA | 15.24 |
4.3 Compensation for Growth
The excellent profitability rating of CSCO may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)4.32
EPS Next 2Y3.82%
EPS Next 3Y5.14%
5. Dividend
5.1 Amount
CSCO has a Yearly Dividend Yield of 2.72%.
CSCO's Dividend Yield is rather good when compared to the industry average which is at 10.86. CSCO pays more dividend than 84.31% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, CSCO has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.72% |
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 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.
CSCO's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP68.09%
EPS Next 2Y3.82%
EPS Next 3Y5.14%
CISCO SYSTEMS INC
NASDAQ:CSCO (12/20/2024, 8:04:05 PM)
After market: 58.52 0 (0%)58.52
+0.89 (+1.54%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners75.28%
Inst Owner Change-0.41%
Ins Owners0.21%
Ins Owner Change4.34%
Market Cap233.07B
Analysts73.33
Price Target63.13 (7.88%)
Short Float %1.43%
Short Ratio3.09
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.72% |
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)8.88%
PT rev (3m)11.43%
EPS NQ rev (1m)-2.51%
EPS NQ rev (3m)-2.51%
EPS NY rev (1m)1.89%
EPS NY rev (3m)2.03%
Revenue NQ rev (1m)4.87%
Revenue NQ rev (3m)4.87%
Revenue NY rev (1m)0.09%
Revenue NY rev (3m)0.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.58 | ||
| Fwd PE | 14.56 | ||
| P/S | 4.4 | ||
| P/FCF | 20.41 | ||
| P/OCF | 19.15 | ||
| P/B | 5.15 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.24 |
EPS(TTM)3.53
EY6.03%
EPS(NY)4.02
Fwd EY6.87%
FCF(TTM)2.87
FCFY4.9%
OCF(TTM)3.06
OCFY5.22%
SpS13.3
BVpS11.37
TBVpS-6.09
PEG (NY)N/A
PEG (5Y)4.32
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 | 2.47 |
F-Score5
WACC9.57%
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 3Y5.14%
EPS Next 5Y4.42%
Revenue 1Y (TTM)-8.72%
Revenue growth 3Y2.6%
Revenue growth 5Y0.72%
Sales Q2Q%-5.64%
Revenue Next Year4.17%
Revenue Next 2Y4.47%
Revenue Next 3Y4.47%
Revenue Next 5Y4.03%
EBIT growth 1Y-29.31%
EBIT growth 3Y-1.84%
EBIT growth 5Y-2.17%
EBIT Next Year15.32%
EBIT Next 3Y6.6%
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%