One-glance verdict
Overvalued
$61.22 our estimate vs market $112.20
Wall Street consensus: $136.16 (122.4% higher than our fair-value estimate)
83% above our estimate, beyond the bull case
Fundamentals snapshot
Cisco Systems, Inc.
CSCO · NMS · Technology · Communication Equipment
Current price
$112.20
52-week range
$66.81 - $130.37
Market cap
$442.36B
Balance sheet
Watch
10.93x Adequate
Net debt $15.27B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 11.8% last year.
- Reward Returns 27.3% on equity, ahead of 40% of its peers.
- Risk Stock trades 71.0% above its 5-year average P/E.
- Risk Insider ownership is only 0.1% (peer median: 0.8%).
What this company does
Cisco Systems, Inc.
Cisco is like the plumber for the internet, selling the essential hardware and software that helps large organizations and governments connect and stay secure online. The company makes most of its money from selling this networking equipment and, increasingly, from software subscriptions that provide steady recurring revenue (predictable income from customers who pay on a regular basis, like a Netflix subscription). This shift is important because it makes their business more stable than relying on one-time hardware sales.
How the company got here
Cisco Systems was started in 1984 by two Stanford University computer scientists who created a new way to connect different computer networks. Their invention, the multiprotocol router, was a key technology that helped build the internet as we know it today. The company grew rapidly during the 1990s internet boom, becoming a dominant provider of networking equipment. At the height of the dot-com bubble in 2000, Cisco was briefly the most valuable company in the world. Over the years, Cisco has expanded from its core business of routers and switches into areas like cybersecurity, collaboration tools, and cloud computing.
What it actually does
Think of Cisco as a company that builds the essential plumbing for the internet and other computer networks. They design and sell the hardware and software that allows computers, phones, and other devices to connect and share information securely and efficiently. While you might not buy their products directly, businesses, governments, and internet service providers rely on Cisco's technology to run their networks. Their offerings range from physical equipment like routers and switches to software for security, video conferencing, and network management.
Networking
This is Cisco's largest and most well-known business, making up more than half of its revenue. It involves selling the core hardware that directs traffic on the internet and within organizations, such as routers and switches. Businesses of all sizes, from small companies to massive internet service providers, pay Cisco for this equipment to build and maintain their computer networks. This segment is the foundation of the company and has been its primary focus since the beginning.
Security
As more of our lives and businesses move online, protecting the information on networks has become critical. Cisco's Security division provides a range of products and services to protect networks from cyber threats. This includes things like firewalls (which act like a digital guard for a network), software to detect and block malicious activity, and identity management solutions. This is a significant and growing part of Cisco's business, as companies and governments look to defend against increasingly sophisticated cyberattacks.
Collaboration
This segment focuses on tools that help people work together, especially when they are not in the same physical location. The most well-known product in this category is Webex, a video conferencing and online meeting platform similar to Zoom or Microsoft Teams. Businesses pay for subscriptions to use these collaboration tools for their employees. While not as large as their networking business, it's an important part of their strategy to support modern workplaces.
Observability
This is a smaller but growing part of Cisco's business that helps companies monitor the health and performance of their computer networks and applications. Think of it like a high-tech dashboard that gives information technology (IT) professionals deep insights into how everything is running. This allows them to spot and fix problems before they affect users. Companies pay for this software to ensure their digital services are reliable and running smoothly.
Services
Beyond selling hardware and software, Cisco also makes a significant portion of its money from providing services. This includes technical support to help customers when something goes wrong, as well as consulting services to help them design and build complex networks. Customers pay for these services to ensure their networks are running optimally and to get expert help when they need it. This provides Cisco with a steady stream of revenue (income a company receives from its normal business activities).
What management is betting on now
Cisco is currently focused on the rise of artificial intelligence (AI) and is working to provide the powerful networking infrastructure that AI systems require. A major part of their strategy is to sell more software and subscriptions, which creates more predictable and recurring revenue (income that is likely to continue in the future) compared to one-time hardware sales. They are also heavily investing in cybersecurity, aiming to provide a comprehensive platform that protects the entire network. The recent acquisition of the data analytics company Splunk is a key part of this strategy to combine networking, security, and observability.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q1
$3.44B
FY2025 Q2
$2.03B
FY2025 Q3
$3.80B
FY2025 Q4
$4.02B
FY2026 Q1
$2.89B
FY2026 Q2
$1.54B
FY2026 Q3
$3.34B
FY2026 Q4
$5.00B
Revenue
$17.25B
Net income
$3.86B
Diluted EPS
0.96
Operating cash flow
$5.39B
Free cash flow
$5.00B
Fetching…
Sources
Revenue
$15.84B
Net income
$3.37B
Diluted EPS
0.85
Operating cash flow
$3.76B
Free cash flow
$3.34B
Fetching…
Sources
Revenue
$15.35B
Net income
$3.17B
Diluted EPS
0.80
Operating cash flow
$1.82B
Free cash flow
$1.54B
Fetching…
Sources
Revenue
$14.88B
Net income
$2.86B
Diluted EPS
0.72
Operating cash flow
$3.21B
Free cash flow
$2.89B
Fetching…
Sources
Revenue
$14.67B
Net income
$2.55B
Diluted EPS
0.64
Operating cash flow
$4.23B
Free cash flow
$4.02B
Fetching…
Sources
Revenue
$14.15B
Net income
$2.49B
Diluted EPS
0.62
Operating cash flow
$4.06B
Free cash flow
$3.80B
Fetching…
Sources
Revenue
$13.99B
Net income
$2.43B
Diluted EPS
0.61
Operating cash flow
$2.24B
Free cash flow
$2.03B
Fetching…
Sources
Revenue
$13.84B
Net income
$2.71B
Diluted EPS
0.68
Operating cash flow
$3.66B
Free cash flow
$3.44B
Fetching…
Sources
Is it cheap or expensive?
Fair value $61.22 vs current price $112.20
Wall Street consensus is the average analyst price target: $136.16 (122.4% higher than our fair-value estimate).
Our most-likely fair value is $61.22 a share — about 45.4% below today's price of $112.20, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Watch
Net debt $15.3B. Interest coverage 10.9x.
Net debt
$15.27B
Interest coverage
10.93x
Cisco Systems, Inc.'s profit covers its interest bill about 10.9 times over. which is stronger than most peers shown here.
Watch
Worse cushion
Baseline
Better cushion
CSCO
BASELINE
Cisco Systems, Inc.
Total debt $31.19B Interest coverage 10.93x This is the baseline the peer rows are being compared against.
Total debt $0.00 Interest coverage 10.06x -8% vs CSCO Has roughly the same debt cushion as CSCO.
Total debt $20.32B Interest coverage 14.05x +29% vs CSCO Carries about 1.3x more debt cushion than CSCO.
Total debt $35.28B Interest coverage 5.41x -50% vs CSCO Carries about 2.0x less debt cushion than CSCO.
Total debt $65.27B Interest coverage 6.46x -41% vs CSCO Carries about 1.7x less debt cushion than CSCO.
What you should know
The case for and against CSCO
3 Rewards
2 Risks
Rewards
-
Revenue grew 11.8% last year.
-
Returns 27.3% on equity, ahead of 40% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 71.0% above its 5-year average P/E.
-
Insider ownership is only 0.1% (peer median: 0.8%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
33.69x
Forward P/E
19.96x
P/B
8.80x
P/S
6.99x
EV/EBITDA
24.55x
PEG ratio
1.00x
Profitability
How much profit each dollar creates
Gross margin
64.5%
Operating margin
27.7%
Net margin
21.0%
ROE
27.3%
ROA
8.0%
Health
Liquidity and balance-sheet strength
Debt / equity
0.62x
Current ratio
0.93x
Quick ratio
0.69x
Total debt
$31.19B
Total cash
$15.92B
Growth
How the business has been compounding
Revenue TTM
$63.33B
Revenue 5Y CAGR
5.3%
EPS TTM
3.33
EPS 5Y CAGR
-3.3%
Cash flow
How much cash the business throws off
Operating CF TTM
$14.18B
Free CF TTM
$12.77B
FCF margin
20.2%
Dividend
Shareholder payout
Yield
1.5%
Payout ratio
49.9%
Last ex-div date
2026-10-02