Cisco Systems (CSCO)
NASDAQ:CSCO
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Cisco Systems
(NASDAQ:CSCO)
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Rating:74Outperform
Price Target:
$97.00
▲(20.23% Upside)
Action:ReiteratedDate:02/12/26
The score is driven primarily by strong underlying financial quality (durable margins and robust free cash flow) and an upbeat earnings call with confident FY26 guidance and AI/networking momentum. Technicals are supportive but overbought, while valuation (high P/E with only modest yield) meaningfully tempers the overall rating.
Positive Factors
Free cash flow generation
Cisco's FCF closely tracks net income (94–97%), indicating durable cash conversion. This supports sustained capital returns, reinvestment in networking/AI supply commitments, and balance-sheet flexibility for multi-year initiatives even if revenue growth slows.
Negative Factors
Rising leverage
Leverage rising to ~0.63 from prior ~0.2–0.27 materially reduces balance-sheet flexibility. Higher debt increases fixed obligations and raises vulnerability to profit or cash-flow shocks, limiting room for opportunistic M&A or large capex if demand softens.
Read all positive and negative factors
Positive Factors
Negative Factors
Free cash flow generation
Cisco's FCF closely tracks net income (94–97%), indicating durable cash conversion. This supports sustained capital returns, reinvestment in networking/AI supply commitments, and balance-sheet flexibility for multi-year initiatives even if revenue growth slows.
Read all positive factors
Cisco Systems (CSCO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$318.68B
Dividend Yield2.09%
Average Volume (3M)23.79M
Price to Earnings (P/E)23.2
Beta (1Y)0.87
Revenue Growth8.91%
EPS Growth14.53%
CountryUS
Employees90,400
SectorTechnology
Sector Strength88
IndustryCommunication Equipment
Share Statistics
EPS (TTM)1.04
Shares Outstanding3,949,893,000
10 Day Avg. Volume28,769,007
30 Day Avg. Volume23,786,934
Financial Highlights & Ratios
PEG Ratio68.41
Price to Book (P/B)5.83
Price to Sales (P/S)4.82
P/FCF Ratio20.55
Enterprise Value/Market Cap1.07
Enterprise Value/Revenue5.78
Enterprise Value/Gross Profit8.92
Enterprise Value/Ebitda20.08
Forecast
1Y Price Target
$92.00Price Target Upside14.03% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
EPS Forecast (FY)4.15
Revenue Forecast (FY)$61.56B
Cisco Systems Business Overview & Revenue Model
Company Description
Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol based networking and other products related to the communications and information technology industry in the Americas, Europe, the Middle East, Africa, the Asia Pacific, Japan,...
How the Company Makes Money
Cisco generates revenue primarily through the sale of its networking hardware and software solutions, which include routers, switches, and security products. The company's revenue model is diversified across several key segments: Infrastructure Pl...
Cisco Systems Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyCisco Systems Earnings Call Summary
Earnings Call Date:Feb 11, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:May 20, 2026
Earnings Call Sentiment Positive
The call conveyed strong overall momentum: record revenue, double-digit product and EPS growth, robust order activity across networking and AI infrastructure, meaningful progress with Silicon One and optics, expanding recurring revenue and solid capital returns. These positives are tempered by near-term margin pressure driven by memory price inflation and product mix, the Splunk transition and a one-time tax cash impact that reduced operating cash flow. Hyperscaler demand is substantial but lumpy and concentrated, creating some timing and visibility risk. Management communicated clear mitigation actions (price increases, contract adjustments, advanced purchase commitments) and reiterated confidence in FY26 targets.Positive Updates
Record Revenue and EPS Growth
Total revenue of $15.3 billion, up 10% year-over-year; non-GAAP net income of $4.1 billion, up 10%; non-GAAP EPS of $1.04, up 11%, both exceeding the high end of guidance.
Negative Updates
Gross Margin Pressure from Mix and Memory Costs
Total non-GAAP gross margin 67.5%, down 120 basis points YoY; product gross margin 66.4%, down 130 basis points, primarily due to unfavorable mix and higher memory costs; Q3 gross margin guide implies further near-term pressure (65.5%–66.5%).
Read all updates
Q2-2026 Updates
Positive
Negative
Record Revenue and EPS Growth
Total revenue of $15.3 billion, up 10% year-over-year; non-GAAP net income of $4.1 billion, up 10%; non-GAAP EPS of $1.04, up 11%, both exceeding the high end of guidance.
Read all positive updates
Company Guidance
Cisco guided Q3 revenue of $15.4–$15.6 billion, non‑GAAP gross margin of 65.5%–66.5%, non‑GAAP operating margin of 33.5%–34.5%, non‑GAAP EPS of $1.02–$1.04 and an approximate non‑GAAP tax rate of 19%; for fiscal 2026 it expects revenue of $61.2–$61.7 billion and non‑GAAP EPS of $4.13–$4.17, assuming current tariffs and exemptions remain in place through FY26. The company also reiterated capital return and AI targets, raising the quarterly dividend $0.01 to $0.42, committing to return at least 50% of free cash flow, and forecasting AI orders in excess of $5 billion with more than $3 billion of AI infrastructure revenue from hyperscalers in FY26.Cisco Systems Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
72
Positive
Cash Flow
84
Very Positive
| Breakdown | TTM | Jul 2025 | Jul 2024 | Jul 2023 | Jul 2022 | Jul 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 59.05B | 56.65B | 53.80B | 57.00B | 51.56B | 49.82B |
| Gross Profit | 38.27B | 36.79B | 34.83B | 35.75B | 32.25B | 31.89B |
| EBITDA | 17.00B | 15.38B | 15.75B | 17.47B | 16.79B | 15.56B |
| Net Income | 11.08B | 10.18B | 10.32B | 12.61B | 11.81B | 10.59B |
Balance Sheet | ||||||
| Total Assets | 123.37B | 122.29B | 124.41B | 101.85B | 94.00B | 97.50B |
| Cash, Cash Equivalents and Short-Term Investments | 15.78B | 16.11B | 17.85B | 26.15B | 19.27B | 24.52B |
| Total Debt | 30.09B | 28.09B | 30.97B | 8.39B | 10.56B | 11.53B |
| Total Liabilities | 75.65B | 75.45B | 78.96B | 57.50B | 54.23B | 56.22B |
| Stockholders Equity | 47.72B | 46.84B | 45.46B | 44.35B | 39.77B | 41.27B |
Cash Flow | ||||||
| Free Cash Flow | 12.85B | 13.29B | 10.21B | 19.04B | 12.75B | 14.76B |
| Operating Cash Flow | 13.32B | 14.19B | 10.88B | 19.89B | 13.23B | 15.45B |
| Investing Cash Flow | -918.00M | 1.73B | -20.48B | -5.11B | 1.55B | -5.29B |
| Financing Cash Flow | -14.39B | -15.81B | 6.84B | -11.63B | -15.96B | -12.10B |
Cisco Systems Technical Analysis
Positive
80.68
Price Trends
79.07
Positive
77.44
Positive
72.60
Positive
Market Momentum
0.31
Negative
56.38
Neutral
54.95
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CSCO, the sentiment is Positive. The current price of 80.68 is above the 20-day moving average (MA) of 78.64, above the 50-day MA of 79.07, and above the 200-day MA of 72.60, indicating a bullish trend. The MACD of 0.31 indicates Negative momentum. The RSI at 56.38 is Neutral, neither overbought nor oversold. The STOCH value of 54.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CSCO.
Cisco Systems Risk Analysis
Cisco Systems disclosed 38 risk factors in its most recent earnings report. Cisco Systems reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Cisco Systems Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $167.92B | 46.94 | 31.01% | ― | 27.75% | 25.42% | |
75 Outperform | $17.47B | 20.43 | 20.29% | ― | 9.66% | 23.87% | |
74 Outperform | $318.68B | 23.23 | 23.64% | 2.09% | 8.91% | 14.53% | |
74 Outperform | $138.61B | 71.18 | 15.49% | ― | 15.30% | -60.71% | |
72 Outperform | $61.95B | 31.84 | 123.64% | ― | 14.78% | 22.52% | |
66 Neutral | $32.68B | 17.34 | -0.64% | 2.17% | 14.17% | -102.25% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
CSCO
Cisco Systems
80.68
28.69
55.17%
FFIV
F5, Inc.
309.10
67.57
27.98%
FTNT
Fortinet
83.72
-4.43
-5.03%
PANW
Palo Alto Networks
169.87
17.34
11.37%
ANET
Arista Networks
133.64
64.14
92.29%
HPE
Hewlett Packard Enterprise
24.63
12.43
101.87%
Cisco Systems Corporate Events
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Cisco Stockholders Approve 2005 Plan Amendments
Neutral
Dec 17, 2025
At its Annual Meeting on December 16, 2025, Cisco Systems‘ stockholders approved amendments to the 2005 Stock Incentive Plan, increasing the number of shares authorized for issuance by 57,490,000. This plan remains a key part of Cisco’...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.