NasdaqGS:CSCO

Stock Analysis Report

Executive Summary

Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol based networking and other products related to the communications and information technology industry worldwide.

Snowflake

Solid track record with adequate balance sheet.


Similar Companies

Share Price & News

How has Cisco Systems's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CSCO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-7.7%

CSCO

-5.5%

US Communications

0.7%

US Market


1 Year Return

-2.7%

CSCO

-4.0%

US Communications

12.9%

US Market

Return vs Industry: CSCO exceeded the US Communications industry which returned -4% over the past year.

Return vs Market: CSCO underperformed the US Market which returned 12.9% over the past year.


Shareholder returns

CSCOIndustryMarket
7 Day-7.7%-5.5%0.7%
30 Day-4.1%-3.1%4.4%
90 Day-4.0%-2.5%7.0%
1 Year0.03%-2.7%-1.8%-4.0%15.4%12.9%
3 Year64.0%49.4%43.0%33.9%49.1%39.5%
5 Year96.3%67.7%67.5%48.8%62.7%44.7%

Price Volatility Vs. Market

How volatile is Cisco Systems's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Cisco Systems undervalued compared to its fair value and its price relative to the market?

6.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CSCO ($45.09) is trading below our estimate of fair value ($48.32)

Significantly Below Fair Value: CSCO is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: CSCO is good value based on its PE Ratio (17.8x) compared to the Communications industry average (20.1x).

PE vs Market: CSCO is good value based on its PE Ratio (17.8x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: CSCO is poor value based on its PEG Ratio (2.8x)


Price to Book Ratio

PB vs Industry: CSCO is overvalued based on its PB Ratio (5.6x) compared to the US Communications industry average (1.8x).


Next Steps

Future Growth

How is Cisco Systems forecast to perform in the next 1 to 3 years based on estimates from 26 analysts?

6.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CSCO's forecast earnings growth (6.3% per year) is above the savings rate (2.7%).

Earnings vs Market: CSCO's earnings (6.3% per year) are forecast to grow slower than the US market (14.4% per year).

High Growth Earnings: CSCO's earnings are forecast to grow, but not significantly.

Revenue vs Market: CSCO's revenue (2.8% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: CSCO's revenue (2.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CSCO's Return on Equity is forecast to be high in 3 years time (38.7%)


Next Steps

Past Performance

How has Cisco Systems performed over the past 5 years?

-3.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CSCO has high quality earnings.

Growing Profit Margin: CSCO's current net profit margins (21.2%) are higher than last year (2.5%).


Past Earnings Growth Analysis

Earnings Trend: CSCO's earnings have declined by -3.9% per year over the past 5 years.

Accelerating Growth: CSCO's earnings growth over the past year (778.2%) exceeds its 5-year average (-3.9% per year).

Earnings vs Industry: CSCO earnings growth over the past year (778.2%) exceeded the Communications industry 42.2%.


Return on Equity

High ROE: CSCO's Return on Equity (31.9%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Cisco Systems's financial position?


Financial Position Analysis

Short Term Liabilities: CSCO's short term assets ($41.7B) exceeds its short term liabilities ($24.6B)

Long Term Liabilities: CSCO's short term assets (41.7B) exceeds its long term liabilities (33.5B)


Debt to Equity History and Analysis

Debt Level: CSCO's debt to equity ratio (53.7%) is considered high

Reducing Debt: CSCO's debt to equity ratio has increased from 36.9% to 53.7% over the past 5 years.

Debt Coverage: CSCO's debt is well covered by operating cash flow (84.6%).

Interest Coverage: CSCO earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: CSCO has a low level of unsold assets or inventory.

Debt Coverage by Assets: CSCO's debt is covered by short term assets (assets are 2.3x debt).


Next Steps

Dividend

What is Cisco Systems's current dividend yield, its reliability and sustainability?

3.10%

Current Dividend Yield


Dividend Yield vs Market

company3.1%marketbottom25%1.4%markettop25%3.6%industryaverage3.1%forecastin3Years3.3%

Current dividend yield vs market & industry

Notable Dividend: CSCO's dividend (3.1%) is higher than the bottom 25% of dividend payers in the US market (1.42%).

High Dividend: CSCO's dividend (3.1%) is low compared to the top 25% of dividend payers in the US market (3.65%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, CSCO has been paying a dividend for less than 10 years.

Growing Dividend: CSCO's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (40.6%), CSCO's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CSCO's dividends in 3 years are forecast to be well covered by earnings (45.1% payout ratio).


Next Steps

Management

What is the CEO of Cisco Systems's salary, the management and board of directors tenure and is there insider trading?

4.0yrs

Average management tenure


CEO

Chuck Robbins (53yo)

4.3yrs

Tenure

US$25,829,833

Compensation

Mr. Charles H. Robbins, also known as Chuck, has been Chief Executive Officer of Cisco Systems, Inc., since July 26, 2015 and has been its Chairman of the Board on December 11, 2017. Mr. Robbins as Chairma ...


CEO Compensation Analysis

Compensation vs Market: Chuck's total compensation ($USD25.83M) is above average for companies of similar size in the US market ($USD11.01M).

Compensation vs Earnings: Chuck's compensation has increased by more than 20% in the past year.


Management Age and Tenure

4.0yrs

Average Tenure

55yo

Average Age

Experienced Management: CSCO's management team is considered experienced (4 years average tenure).


Board Age and Tenure

5.0yrs

Average Tenure

63yo

Average Age

Experienced Board: CSCO's board of directors are considered experienced (5 years average tenure).


Insider Trading

Insider Buying: CSCO insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$3,445,56821 Sep 19
David Goeckeler
EntityIndividual
Role
Senior Key Executive
Executive VP and GM of Networking & Security Business
Shares70,000
Max PriceUS$49.22
SellUS$1,124,23614 Jun 19
Steven West
EntityIndividual
Shares20,000
Max PriceUS$56.21
BuyUS$557,40411 Jun 19
Wesley Bush
EntityIndividual
Shares10,000
Max PriceUS$55.74
SellUS$1,562,19614 Mar 19
David Goeckeler
EntityIndividual
Role
Senior Key Executive
Executive VP and GM of Networking & Security Business
Shares30,000
Max PriceUS$52.07
SellUS$444,44626 Feb 19
Mark Chandler
EntityIndividual
Role
Chief Legal Officer
Executive VP
Shares8,853
Max PriceUS$50.20
SellUS$744,90621 Feb 19
Roderick McGeary
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares15,000
Max PriceUS$49.66
SellUS$209,02520 Dec 18
Martha Burns
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares4,744
Max PriceUS$44.06
SellUS$1,199,50314 Dec 18
Steven West
EntityIndividual
Shares25,000
Max PriceUS$47.98
SellUS$1,356,12706 Dec 18
Tiang Yew Tan
EntityIndividual
Role
Chief Operating Officer
Executive VP & Chief Operating Officer
Shares28,000
Max PriceUS$48.43

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Maria Martinez (61yo)

    Executive VP & Chief Customer Experience Officer

    • Tenure: 1.6yrs
    • Compensation: US$14.98m
  • Mark Chandler (63yo)

    Executive VP

    • Tenure: 13.8yrs
  • Gerri Elliott (62yo)

    Executive VP and Chief Sales & Marketing Officer

    • Tenure: 1.6yrs
    • Compensation: US$12.94m
  • Marilyn Mora

    Director of Global Investor Relations

    • Tenure: 0yrs
  • Kelly Kramer (51yo)

    Executive VP & CFO

    • Tenure: 4.8yrs
    • Compensation: US$13.63m
  • Chuck Robbins (53yo)

    Chairman & CEO

    • Tenure: 4.3yrs
    • Compensation: US$25.83m
  • Prat Bhatt (52yo)

    Chief Accounting Officer

    • Tenure: 10.3yrs
  • Jacqui Guichelaar

    Group Chief Information Officer

    • Tenure: 0yrs
  • Irving Tan (49yo)

    Executive VP & Chief Operating Officer

    • Tenure: 1.8yrs
  • David Goeckeler (57yo)

    Executive VP and GM of Networking & Security Business

    • Tenure: 3.7yrs
    • Compensation: US$12.33m

Board Members

  • Michael Capellas (64yo)

    Lead Independent Director

    • Tenure: 0.9yrs
    • Compensation: US$383.96k
  • John Morgridge (86yo)

    Chairman Emeritus

    • Tenure: 13yrs
  • Arun Sarin (64yo)

    Independent Director

    • Tenure: 10.2yrs
    • Compensation: US$340.96k
  • Abe Peled (74yo)

    Chairman of Cisco’s SPVSS Business

    • Tenure: 0.6yrs
  • Martha Burns (61yo)

    Independent Director

    • Tenure: 16yrs
    • Compensation: US$362.96k
  • Rod McGeary (69yo)

    Independent Director

    • Tenure: 16.3yrs
    • Compensation: US$380.96k
  • Mark Garrett (61yo)

    Independent Director

    • Tenure: 1.6yrs
    • Compensation: US$365.96k
  • Kristina Johnson (62yo)

    Independent Director

    • Tenure: 7.3yrs
    • Compensation: US$326.96k
  • Brent Saunders (49yo)

    Independent Director

    • Tenure: 2.7yrs
    • Compensation: US$322.96k
  • Chuck Robbins (53yo)

    Chairman & CEO

    • Tenure: 4.3yrs
    • Compensation: US$25.83m

Company Information

Cisco Systems, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Cisco Systems, Inc.
  • Ticker: CSCO
  • Exchange: NasdaqGS
  • Founded: 1984
  • Industry: Communications Equipment
  • Sector: Tech
  • Market Cap: US$191.354b
  • Shares outstanding: 4.24b
  • Website: https://www.cisco.com

Number of Employees


Location

  • Cisco Systems, Inc.
  • 170 West Tasman Drive
  • San Jose
  • California
  • 95134
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CISXTRA (XETRA Trading Platform)YesCommon SharesDEEURFeb 1990
CSCONasdaqGS (Nasdaq Global Select)YesCommon SharesUSUSDFeb 1990
CSCOWBAG (Wiener Boerse AG)YesCommon SharesATEURFeb 1990
CISDB (Deutsche Boerse AG)YesCommon SharesDEEURFeb 1990
4333SEHK (The Stock Exchange of Hong Kong Ltd.)YesCommon SharesHKHKDFeb 1990
CSCOSWX (SIX Swiss Exchange)YesCommon SharesCHCHFFeb 1990
CSCO *BMV (Bolsa Mexicana de Valores)YesCommon SharesMXMXNFeb 1990
CSCOBVL (Bolsa de Valores de Lima)YesCommon SharesPEUSDFeb 1990
CSCOSNSE (Santiago Stock Exchange)YesCommon SharesCLUSDFeb 1990
CISENXTBR (Euronext Brussels)YesCommon SharesBEUSDFeb 1990
CSCOBASE (Buenos Aires Stock Exchange)CEDEARS EACH 5 REPR 1 COM NPVARARSJan 2000
CSCO34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COM SHBRBRLSep 2013

Biography

Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol based networking and other products related to the communications and information technology industry worldwide. The company offers sw ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/16 23:33
End of Day Share Price2019/11/15 00:00
Earnings2019/10/26
Annual Earnings2019/07/27


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.