Cisco Systems (CSCO) AI Stock Analysis

• Market Cap: $267.83B
• Dividend Yield: 2.39%
• Average Volume (3M): 20.78M
• Price to Earnings (P/E): 26.6
• Beta (1Y): 0.85
• Revenue Growth: 5.30%
• EPS Growth: 3.07%
• Country: US
• Employees: 90,400
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): 0.99
• Shares Outstanding: 3,953,197,000
• 10 Day Avg. Volume: 20,380,153
• 30 Day Avg. Volume: 20,781,377
• PEG Ratio: 8.33
• Price to Book (P/B): 5.80
• Price to Sales (P/S): 4.82
• P/FCF Ratio: 20.55
• 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: $77.00
• Price Target Upside: 14.38% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15

• Rating: 77 Outperform
• Price Target: $77.00 ▲(14.38% Upside)

Cisco's strong financial performance and positive earnings call are the most significant factors driving the score. Technical analysis and valuation provide moderate support, while the absence of notable corporate events keeps the focus on core business fundamentals.

Positive Factors

AI Infrastructure Growth

The significant growth in AI infrastructure orders indicates Cisco's strategic focus on AI, positioning it for long-term growth in this expanding market.

Strong Cash Flow

Robust cash flow growth enhances Cisco's ability to invest in innovation, pay dividends, and repurchase shares, supporting long-term shareholder value.

Innovation and AI Integration

Continued innovation and AI integration strengthen Cisco's competitive position, ensuring relevance in rapidly evolving tech sectors.

Negative Factors

Operating Margin Pressure

Declining margins may indicate rising costs or pricing pressures, potentially affecting Cisco's profitability and operational efficiency long-term.

Decline in Public Sector Orders

A decline in public sector orders could signal challenges in a key market segment, impacting Cisco's revenue diversification and growth potential.

Flat Services Revenue

Flat services revenue growth suggests potential saturation or competitive pressures in this segment, limiting future revenue expansion opportunities.

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 consistent revenue growth, strong profitability, and efficient cash flow management. Minor concerns include 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	122.29B	122.29B	124.41B	101.85B	94.00B	97.50B
Cash, Cash Equivalents and Short-Term Investments	17.24B	17.24B	19.37B	26.34B	19.27B	24.52B
Total Debt	29.64B	29.64B	32.23B	9.41B	10.56B	12.69B
Total Liabilities	75.45B	75.45B	78.96B	57.50B	54.23B	56.22B
Stockholders Equity	46.84B	46.84B	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: Positive
• Last Price: 67.32
• 50DMA: Negative
• 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 67.32 is below the 20-day moving average (MA) of 67.72, below the 50-day MA of 68.13, and above the 200-day MA of 62.87, indicating a neutral trend. The MACD of -0.08 indicates Negative momentum. The RSI at 50.58 is Neutral, neither overbought nor oversold. The STOCH value of 50.55 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
ANET	83 Outperform	179.28B	56.26	―	―	25.97%	31.05%
CSCO	77 Outperform	$267.83B	26.61	22.65%	2.39%	5.30%	3.07%
HPE	77 Outperform	32.27B	30.89	5.11%	2.15%	14.39%	-38.96%
FFIV	68 Neutral	18.64B	28.57	19.22%	―	8.94%	22.30%
FTNT	67 Neutral	64.06B	33.21	94.14%	―	14.46%	48.06%
NOK	62 Neutral	25.27B	24.33	6.18%	3.31%	-2.39%	157.33%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%