Cisco Systems (CSCO) AI Stock Analysis

• Market Cap: $268.78B
• Dividend Yield: 2.42%
• Average Volume (3M): 20.32M
• Price to Earnings (P/E): 26.6
• Beta (1Y): 0.86
• Revenue Growth: 5.30%
• EPS Growth: 3.07%
• Country: US
• Employees: 90,400
• Sector: Technology
• Sector Strength: 84
• Industry: Communication Equipment
• EPS (TTM): 0.99
• Shares Outstanding: 3,959,998,300
• 10 Day Avg. Volume: 16,136,906
• 30 Day Avg. Volume: 20,322,758
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.07
• Enterprise Value/Revenue: 5.06
• Enterprise Value/Gross Profit: 7.77
• Enterprise Value/Ebitda: 18.07
• 1Y Price Target: $76.00
• Price Target Upside: 11.78% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18

• Rating: 80 Outperform
• Price Target: $79.00 ▲(16.19% Upside)

Cisco's strong financial performance and positive earnings call are the most significant factors driving the stock score. The company's strategic focus on AI and innovation, coupled with robust cash flow management, supports its competitive position. Technical analysis and valuation present moderate concerns, but they are outweighed by the company's solid fundamentals and growth prospects.

Positive Factors

AI and Networking Growth

Cisco continues to execute in line with expectations, benefiting from an enterprise refresh cycle in networking and incremental AI revenues from hyperscalers.

AI Infrastructure

AI infrastructure orders reached $800mn for the quarter and $2.1bn for the year, while overall networking orders grew double digits in 4Q.

Legal Settlement

The legal settlement results in an escrow return to the company and a forfeiture of supplier prepayments, with no additional cash outlay by Cisco.

Negative Factors

Global Economic Concerns

Cisco could be adversely affected by weaker-than-anticipated global economic growth and market share losses across key product areas.

Macro Uncertainty and Competition

Broader macro uncertainty and the persistence of tough competition across its core markets are seen as offsetting factors for Cisco's growth.

Security and Observability Challenges

Continued underperformance in Security & Observability segments.

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, and China. The company also offers switching portfolio encompasses campus switching as well as data center switching; enterprise routing portfolio interconnects public and private wireline and mobile networks, delivering highly secure, and reliable connectivity to campus, data center and branch networks; and wireless products include indoor and outdoor wireless coverage designed for seamless roaming use of voice, video, and data applications. In addition, it provides security, which comprising network security, identity and access management, secure access service edge, and threat intelligence, detection, and response offerings; collaboration products, such as Webex Suite, collaboration devices, contact center, and communication platform as a service; end-to-end collaboration solutions that can be delivered from the cloud, on-premise or within hybrid cloud environments allowing customers to transition their collaboration solutions from on-premise to the cloud; and observability offers network assurance, monitoring and analytics and observability suite. Further, the company offers a range of service and support options for its customers, including technical support and advanced services and advisory services. It serves businesses of various sizes, public institutions, governments, and service providers. The company sells its products and services directly, as well as through systems integrators, service providers, other resellers, and distributors. Cisco Systems, Inc. has strategic alliances with other companies. Cisco Systems, Inc. was incorporated in 1984 and is headquartered in San Jose, California.

How the Company Makes Money

Cisco generates revenue primarily through the sale of hardware, software, and services. Key revenue streams include the sale of networking equipment such as routers and switches, which are essential for data traffic management. Additionally, the company earns substantial income from its software solutions, particularly in areas like cybersecurity and cloud services, as enterprises increasingly move towards digital transformation. Subscription-based services, particularly for collaboration tools and security solutions, represent a growing segment of Cisco's revenue model. Furthermore, Cisco often enters into strategic partnerships with other technology providers and enterprises, enhancing its product offerings and market reach, which contributes significantly to its overall earnings. This multi-faceted approach allows Cisco to maintain a strong presence in the tech industry and adapt to changing market demands.

Cisco Systems Financial Statement Overview

Summary

Cisco Systems exhibits solid financial performance with steady revenue growth, strong profitability, and efficient cash flow management. Minor concerns exist regarding operating margin pressures and moderate leverage, but overall financial health remains robust.

Income Statement

Cisco Systems has demonstrated consistent revenue growth with a 1.85% increase in the latest year. The company maintains strong profitability with a gross profit margin of 63.87% and a net profit margin of 18.45%. However, there is a slight decline in EBIT and EBITDA margins compared to previous years, indicating potential pressure on operating efficiency.

Balance Sheet

The balance sheet reflects a stable financial position with a manageable debt-to-equity ratio of 0.60, indicating moderate leverage. Return on equity remains robust at 22.19%, showcasing effective utilization of shareholder funds. However, the equity ratio suggests a moderate reliance on debt financing.

Cash Flow

Cisco's cash flow position is strong, with a 3.79% growth in free cash flow, indicating healthy cash generation. The operating cash flow to net income ratio of 0.40 suggests efficient cash conversion, while the free cash flow to net income ratio of 0.94 highlights substantial cash retention relative to earnings.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	56.65B	56.65B	53.80B	57.00B	51.56B	49.82B
Gross Profit	36.90B	36.18B	34.83B	35.75B	32.25B	31.89B
EBITDA	15.86B	15.86B	15.75B	17.47B	16.79B	15.56B
Net Income	10.45B	10.45B	10.32B	12.61B	11.81B	10.59B
Balance Sheet
Total Assets	122.56B	122.56B	124.41B	101.85B	94.00B	97.50B
Cash, Cash Equivalents and Short-Term Investments	16.11B	16.11B	19.37B	26.34B	19.27B	24.52B
Total Debt	28.09B	28.09B	32.23B	9.41B	10.56B	12.69B
Total Liabilities	75.45B	75.45B	78.96B	57.50B	54.23B	56.22B
Stockholders Equity	47.12B	47.12B	45.46B	44.35B	39.77B	41.27B
Cash Flow
Free Cash Flow	13.29B	13.29B	10.21B	19.04B	12.75B	14.76B
Operating Cash Flow	14.19B	14.19B	10.88B	19.89B	13.23B	15.45B
Investing Cash Flow	1.73B	1.73B	-20.48B	-5.11B	1.55B	-5.29B
Financing Cash Flow	-15.81B	-15.81B	6.84B	-11.63B	-15.96B	-12.10B

Cisco Systems Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 67.99
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CSCO, the sentiment is Neutral. The current price of 67.99 is below the 20-day moving average (MA) of 68.54, below the 50-day MA of 68.39, and above the 200-day MA of 62.11, indicating a neutral trend. The MACD of -0.03 indicates Positive momentum. The RSI at 49.03 is Neutral, neither overbought nor oversold. The STOCH value of 39.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CSCO.

Cisco Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ANET	83 Outperform	$177.43B	55.51	33.64%	―	25.97%	31.05%
CSCO	80 Outperform	$268.78B	26.58	22.65%	2.42%	5.30%	3.07%
HPE	77 Outperform	$29.76B	23.43	5.37%	2.21%	14.16%	-38.96%
FFIV	68 Neutral	$17.62B	27.25	20.58%	―	8.94%	22.30%
FTNT	67 Neutral	$58.57B	30.51	165.17%	―	14.46%	48.06%
NOK	62 Neutral	$24.58B	22.48	4.31%	3.37%	-2.39%	157.33%
Sector *	61 Neutral	$35.51B	8.11	-11.05%	1.89%	8.55%	-8.72%

Cisco Systems Corporate Events

Cisco Systems Amends Bylaws for Director Nominations

On August 21, 2025, Cisco Systems‘ Board of Directors amended the company’s bylaws to address deficiencies in director nomination notices submitted by stockholders. These amendments, which became effective immediately, include a cure process for such deficiencies and incorporate ministerial changes for clarity and consistency, potentially impacting shareholder engagement and governance processes.

Cisco Systems Appoints New CFO Mark Patterson

On June 5, 2025, Cisco Systems‘ Compensation and Management Development Committee approved an equity award for Mark Patterson, marking his appointment as Executive Vice President and Chief Financial Officer. Patterson received 47,832 restricted stock units, which will vest over three years, reflecting Cisco’s strategic approach to executive compensation and leadership development.