Cisco (CSCO)
NASDAQ:CSCO
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Cisco Systems
(NASDAQ:CSCO)
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Rating:72Outperform
Price Target:
$128.00
▲(48.41% Upside)
Action:Reiterated
Date:05/15/26
CSCO scores well primarily on resilient fundamentals and a constructive earnings outlook driven by accelerating AI/hyperscaler demand and strong order momentum. The score is held back by overbought technical conditions, a relatively higher valuation (P/E ~26), and identified execution/margin risks (memory-driven mix pressure, elevated inventory/commitments, and restructuring charges).
Positive Factors
AI / Hyperscaler Demand
Sizable, multi-year hyperscaler AI orders create a durable demand stream for Cisco's optics, silicon and networking products. Large, concentrated hyperscaler contracts underpin capacity planning, scale economics and multi-year revenue visibility supporting investment and product roadmaps.
Negative Factors
Higher Leverage
Materially higher leverage reduces financial flexibility and raises refinancing and interest-rate sensitivity. Elevated debt limits ability to opportunistically fund inorganic growth or cushion margin shocks, increasing risk if cash flow normalizes or capital costs rise.
Read all positive and negative factors
Positive Factors
Negative Factors
AI / Hyperscaler Demand
Sizable, multi-year hyperscaler AI orders create a durable demand stream for Cisco's optics, silicon and networking products. Large, concentrated hyperscaler contracts underpin capacity planning, scale economics and multi-year revenue visibility supporting investment and product roadmaps.
Read all positive factors
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 (CSCO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$450.70B
Dividend Yield2.09%
Average Volume (3M)22.23M
Price to Earnings (P/E)26.1
Beta (1Y)0.92
Revenue Growth9.21%
EPS Growth25.97%
CountryUS
Employees90,400
SectorTechnology
Sector Strength88
IndustryCommunication Equipment
Share Statistics
EPS (TTM)3.02
Shares Outstanding3,941,434,600
10 Day Avg. Volume32,227,809
30 Day Avg. Volume22,227,262
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 Cap1.06
Enterprise Value/Revenue7.83
Enterprise Value/Gross Profit12.18
Enterprise Value/Ebitda27.29
Forecast
1Y Price Target
$124.57Price Target Upside44.43% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering17
EPS Forecast (FY)4.27
Revenue Forecast (FY)$62.78B
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 primarily makes money by selling technology products and by selling software and services—many delivered on a subscription basis—along with support tied to its installed base.
1) Product sales (hardware and related components)
- Networking ...
Cisco Systems Earnings Call Summary
Earnings Call Date:May 13, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Aug 19, 2026
Earnings Call Sentiment Positive
The call conveyed strong, broad-based demand driven by AI infrastructure, networking, optics and hyperscaler wins, with record revenue, robust order growth (35% total product orders) and improved operating performance. Key positives include material hyperscaler AI momentum (Q3 hyperscaler orders $1.9B; FY '26 hyperscaler orders now expected ~ $9B), accelerating networking and Acacia optics growth, and disciplined capital returns. Near-term headwinds include product gross margin pressure from memory and mix, the Splunk cloud transition weighing on revenue, sizable inventory and advanced purchase commitments, and restructuring charges of up to $1B. On balance the strengths — notably the AI and hyperscaler traction and above-guidance results — outweigh the challenges presented, supporting an upbeat outlook but with watch points around margin and execution of supply/cost initiatives.Positive Updates
Record Quarterly Revenue and EPS Beat
Q3 revenue was a record $15.8B, up 12% year-over-year and above the high end of guidance. Non-GAAP net income was $4.2B and non-GAAP EPS was $1.06, up 10% year-over-year.
Negative Updates
Gross Margin Pressure from Mix and Memory Costs
Total non-GAAP gross margin fell to 66.0%, down 260 basis points YoY; non-GAAP product gross margin was 64.3%, down 330 basis points primarily due to product mix and higher memory costs despite productivity measures.
Read all updates
Q3-2026 Updates
Positive
Negative
Record Quarterly Revenue and EPS Beat
Q3 revenue was a record $15.8B, up 12% year-over-year and above the high end of guidance. Non-GAAP net income was $4.2B and non-GAAP EPS was $1.06, up 10% year-over-year.
Read all positive updates
Company Guidance
Cisco provided Q4 and full‑year FY‑26 guidance and several forward-looking metrics: for Q4 FY‑26 revenue is guided to $16.7B–$16.9B with non‑GAAP gross margin of 65.5%–66.5%, non‑GAAP operating margin of 34%–35%, non‑GAAP EPS of $1.16–$1.18 and an assumed non‑GAAP tax rate of ~19% (assumes current tariffs and exemptions remain in place). For FY‑26 the company guides revenue of $62.8B–$63.0B and non‑GAAP EPS of $4.27–$4.29; it also announced a restructuring expected to generate up to $1.0B of pretax charges (about $450M recognized in Q4 FY‑26, with the remainder in FY‑27). Separately, Cisco raised its AI infrastructure expectations for hyperscalers to roughly $9B of orders in FY‑26 (≈4.5x FY‑25) with roughly $4B of that to be recognized as FY‑26 revenue, and management said it is reasonable to expect at least $6B of AI hyperscaler revenue in FY‑27.Cisco Systems Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
70
Positive
Cash Flow
74
Positive
| Breakdown | TTM | Jul 2025 | Jul 2024 | Jul 2023 | Jul 2022 | Jul 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 60.75B | 56.65B | 53.80B | 57.00B | 51.56B | 49.82B |
| Gross Profit | 39.08B | 36.79B | 34.83B | 35.75B | 32.25B | 31.89B |
| EBITDA | 17.44B | 15.38B | 15.75B | 17.47B | 16.79B | 15.56B |
| Net Income | 11.96B | 10.18B | 10.32B | 12.61B | 11.81B | 10.59B |
Balance Sheet | ||||||
| Total Assets | 125.55B | 122.29B | 124.41B | 101.85B | 94.00B | 97.50B |
| Cash, Cash Equivalents and Short-Term Investments | 16.64B | 16.11B | 17.85B | 26.15B | 19.27B | 24.52B |
| Total Debt | 31.30B | 28.09B | 30.97B | 8.39B | 10.56B | 11.53B |
| Total Liabilities | 76.69B | 75.45B | 78.96B | 57.50B | 54.23B | 56.22B |
| Stockholders Equity | 48.86B | 46.84B | 45.46B | 44.35B | 39.77B | 41.27B |
Cash Flow | ||||||
| Free Cash Flow | 12.62B | 13.29B | 10.21B | 19.04B | 12.75B | 14.76B |
| Operating Cash Flow | 13.03B | 14.19B | 10.88B | 19.89B | 13.23B | 15.45B |
| Investing Cash Flow | -3.49B | 1.73B | -20.48B | -5.11B | 1.55B | -5.29B |
| Financing Cash Flow | -11.29B | -15.81B | 6.84B | -11.63B | -15.96B | -12.10B |
Cisco Systems Technical Analysis
Positive
86.25
Price Trends
88.10
Positive
82.84
Positive
76.76
Positive
Market Momentum
8.16
Negative
76.86
Negative
88.19
Negative
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 86.25 is below the 20-day moving average (MA) of 98.76, below the 50-day MA of 88.10, and above the 200-day MA of 76.76, indicating a bullish trend. The MACD of 8.16 indicates Negative momentum. The RSI at 76.86 is Negative, neither overbought nor oversold. The STOCH value of 88.19 is Negative, 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | $95.24B | 28.24 | 155.65% | ― | 15.75% | 6.24% | |
79 Outperform | $201.27B | 71.18 | 15.49% | ― | 15.43% | -2.40% | |
78 Outperform | $21.58B | 27.76 | 19.88% | ― | 9.69% | 15.58% | |
78 Outperform | $176.91B | 37.74 | 30.58% | ― | 30.57% | 22.96% | |
72 Outperform | $450.70B | 26.09 | 25.14% | 2.09% | 9.21% | 25.97% | |
69 Neutral | $44.85B | 17.34 | -0.64% | 2.17% | 15.04% | -108.60% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
CSCO
Cisco Systems
114.35
52.57
85.10%
FFIV
F5, Inc.
382.42
96.16
33.59%
FTNT
Fortinet
130.00
27.16
26.41%
PANW
Palo Alto Networks
246.66
65.40
36.08%
ANET
Arista Networks
140.49
48.06
52.00%
HPE
Hewlett Packard Enterprise
33.80
16.69
97.58%
Cisco Systems Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Cisco Announces Restructuring to Refocus on AI Growth
Positive
May 13, 2026
On May 13, 2026, Cisco announced a restructuring plan designed to redirect spending toward key growth areas including silicon, optics, security and artificial intelligence, and said it expects to incur up to $1 billion in mainly cash-based pre-tax...
Executive/Board Changes
Cisco Announces New Chief Accounting Officer Appointment
Neutral
May 1, 2026
Cisco Systems announced that M. Victoria Wong will retire as Senior Vice President and Chief Accounting Officer, effective May 19, 2026, after which she will serve as an Executive Advisor until July 25, 2026. The company’s Board appointed cu...
Executive/Board Changes
Cisco Appoints Peter Shimer to Board, Audit Committee
Neutral
Apr 6, 2026
On March 31, 2026, Cisco announced that director Daniel H. Schulman had notified the company of his decision to resign from its Board of Directors effective May 21, 2026, due to the increased demands of his new role as Chief Executive Officer of V...
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.