Cisco Systems (CSCO) AI Stock Analysis

• Market Cap: $249.92B
• Dividend Yield: 2.55%
• Average Volume (3M): 20.42M
• Price to Earnings (P/E): 25.9
• Beta (1Y): 0.82
• Revenue Growth: 0.47%
• EPS Growth: -17.77%
• Country: US
• Employees: 90,400
• Sector: Technology
• Sector Strength: 76
• Industry: Communication Equipment
• EPS (TTM): 0.96
• Shares Outstanding: 3,959,998,300
• 10 Day Avg. Volume: 24,593,508
• 30 Day Avg. Volume: 20,422,290
• PEG Ratio: 3.72
• Price to Book (P/B): 5.51
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 18.76
• Enterprise Value/Market Cap: 1.10
• Enterprise Value/Revenue: 1.27
• Enterprise Value/Gross Profit: 7.56
• Enterprise Value/Ebitda: 5.02
• 1Y Price Target: $70.77
• Price Target Upside: 12.14% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16

• Rating: 78 Outperform
• Price Target: $73.00 ▲( 15.67% Upside)

Cisco Systems demonstrates robust financial performance with strong profitability and cash flow, underpinning its stability in the communication equipment industry. While technical indicators suggest caution due to potential overbought conditions, the positive momentum aligns well with strategic growth in AI infrastructure and partnerships. Valuation remains a concern due to a higher P/E ratio, yet the company's dividend yield adds some long-term investment appeal. Overall, Cisco is well-positioned for growth, though investors should remain mindful of external challenges such as tariffs and sector-specific headwinds.

Positive Factors

AI momentum

Cisco received over $600M in new AI orders in F3Q25 compared to $350M in F2Q25, indicating accelerating AI momentum.

Enterprise demand

Resilient demand in relation to Networking upgrades from Enterprises customers, which remains very early in the recovery cycle.

Revenue and margin performance

CSCO delivered a solid beat and raise during F3Q25 with strong revenue and margin performance.

Negative Factors

Competition concerns

Concerns about tough competition could confine earnings growth to the midsingle-digit range.

Security challenges

Security remains weak, with declines in legacy activities only partially offset by new product growth.

Tariff headwinds

Guidance assumes tariffs rates of 30% for China, 25% for Canada and Mexico, and 10% for other countries until July 9, which could create more substantial headwinds for Cisco.

Cisco Systems Business Overview & Revenue Model

Company Description

Cisco Systems, Inc. is a global technology leader specializing in networking hardware, telecommunications equipment, and other high-technology services and products. The company is headquartered in San Jose, California, and operates across various sectors, including enterprise networks, security, collaboration, and the Internet of Things (IoT). Cisco is renowned for its core products like routers, switches, and advanced networking solutions that empower businesses to connect seamlessly and securely.

How the Company Makes Money

Cisco Systems makes money primarily through the sale of its networking hardware and software solutions. The company generates revenue from multiple streams, including product sales and services. Key product categories include Infrastructure Platforms, which encompasses switching, routing, wireless, and data center products. Additionally, Cisco earns substantial revenue from its Applications segment, offering collaboration tools like Webex, security products, and other software solutions. The Services segment contributes to revenue by providing technical support and advanced services to help customers optimize their network operations. Cisco's strategic acquisitions and partnerships further enhance its product offerings and market reach, contributing significantly to its earnings.

Cisco Systems Financial Statement Overview

Summary

Cisco Systems exhibits a strong financial profile characterized by robust profitability, efficient operational management, and impressive cash flow generation. While revenue has slightly declined, the company maintains healthy profit margins and a stable balance sheet. Moderate leverage and strong cash flow metrics provide a solid foundation for sustaining growth and managing financial obligations.

Income Statement

Cisco Systems demonstrates solid profitability with a gross profit margin of 65.2% and a net profit margin of 17.6% in TTM (Trailing-Twelve-Months). Although revenue decreased slightly by 2.4% compared to the previous year, EBIT and EBITDA margins remain strong at 20.3% and 18.9%, respectively, indicating efficient operational management. The company maintains robust profitability metrics, despite a slight dip in revenue, showcasing its ability to manage costs effectively.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.64, indicating moderate leverage. Cisco's return on equity (ROE) is strong at 21.3%, suggesting effective use of shareholder capital. The equity ratio is 38.3%, pointing to a well-capitalized structure. Despite a decrease in total assets, the company maintains a healthy equity base, mitigating potential risks from liabilities.

Cash Flow

Cisco's cash flow performance is impressive, with a free cash flow growth rate of 32.2% in TTM (Trailing-Twelve-Months), driven by strong operating cash flow. The operating cash flow to net income ratio is 1.4, and the free cash flow to net income ratio is 1.4, indicating robust cash generation relative to earnings. This strong cash flow performance supports financial flexibility and growth initiatives.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
55.62B	53.80B	57.00B	51.56B	49.82B	49.30B
	Gross Profit
36.29B	34.83B	35.75B	32.25B	31.89B	31.68B
	EBIT
11.29B	12.18B	15.03B	13.97B	12.83B	13.62B
	EBITDA
10.51B	15.75B	17.47B	16.79B	15.56B	16.36B
	Net Income Common Stockholders
9.79B	10.32B	12.61B	11.81B	10.59B	11.21B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
18.67B	17.85B	26.15B	19.27B	24.52B	29.42B
	Total Assets
123.33B	124.41B	101.85B	94.00B	97.50B	94.85B
	Total Debt
31.99B	30.96B	8.39B	9.52B	11.53B	14.58B
	Net Debt
22.92B	23.45B	-1.73B	2.44B	2.35B	2.77B
	Total Liabilities
78.06B	78.96B	57.50B	54.23B	56.22B	56.93B
	Stockholders Equity
45.28B	45.46B	44.35B	39.77B	41.27B	37.92B
Cash Flow		Free Cash Flow
13.49B	10.21B	19.04B	12.75B	14.76B	14.66B
	Operating Cash Flow
13.69B	10.88B	19.89B	13.23B	15.45B	15.43B
	Investing Cash Flow
1.18B	-20.48B	-5.11B	1.55B	-5.29B	3.50B
	Financing Cash Flow
-16.37B	6.84B	-11.63B	-16.14B	-12.04B	-18.89B

Cisco Systems Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 63.11
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 63.11 is above the 20-day moving average (MA) of 60.83, above the 50-day MA of 59.23, and above the 200-day MA of 56.80, indicating a bullish trend. The MACD of 1.46 indicates Negative momentum. The RSI at 64.23 is Neutral, neither overbought nor oversold. The STOCH value of 52.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CSCO.

Cisco Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CSCO	78 Outperform	$249.92B	25.86	21.36%	2.55%	0.47%	-17.77%
MSI	74 Outperform	$69.92B	34.95	189.18%	0.99%	7.45%	46.78%
HPE	70 Outperform	$22.88B	8.62	12.09%	2.98%	10.93%	43.19%
ERIC	68 Neutral	$29.03B	184.65	1.67%	2.08%	-2.08%	―
JNPR	64 Neutral	$12.03B	34.40	7.58%	2.44%	-2.56%	52.05%
NOK	64 Neutral	$27.92B	35.60	5.70%	1.89%	-9.96%	-6.83%
Sector *	61 Neutral	$11.29B	10.07	-7.05%	2.96%	7.47%	-10.75%

Cisco Systems Corporate Events

Cisco Announces Leadership Changes Amidst Executive Retirement

On May 9, 2025, Scott Herren announced his retirement as Cisco’s Executive Vice President and Chief Financial Officer, effective July 26, 2025. Mark Patterson will succeed him, starting July 27, 2025, while Jeetu Patel will become President and Chief Product Officer on May 14, 2025. These leadership changes are expected to influence Cisco’s strategic direction and operational focus, with both Patterson and Patel bringing extensive experience within the company and the tech industry.

The most recent analyst rating on (CSCO) stock is a Buy with a $62.00 price target. To see the full list of analyst forecasts on Cisco Systems stock, see the CSCO Stock Forecast page.

Cisco Systems Appoints Kevin Weil to Board

On May 12, 2025, Cisco Systems appointed Kevin Weil, Chief Product Officer of OpenAI, to its Board of Directors, recognizing him as an independent member under Nasdaq standards. Weil will receive standard compensation for non-employee directors, including cash and equity options, and has entered into Cisco’s Indemnity Agreement, ensuring legal protection during his tenure.

The most recent analyst rating on (CSCO) stock is a Buy with a $62.00 price target. To see the full list of analyst forecasts on Cisco Systems stock, see the CSCO Stock Forecast page.