Assessing Cisco Systems (CSCO) Valuation After Recent Share Price Momentum

What Cisco Systems (CSCO) investors may want to watch now

Cisco Systems (CSCO) has attracted attention after recent share price moves, with the stock showing positive returns over the past week, month, and past 3 months. This has prompted investors to reassess its current valuation.

See our latest analysis for Cisco Systems.

Cisco’s recent momentum has been building, with a 6.2% 1 month share price return at a latest share price of $79.2, while the 1 year total shareholder return of 26.8% and 5 year total shareholder return of 104% reflect stronger long term performance.

If this move in Cisco has you thinking about other tech opportunities tied to digital infrastructure, take a look at our screener of 34 AI infrastructure stocks.

With Cisco posting a 26.8% 1 year total return and trading around an 8.1% discount to one intrinsic value estimate, investors may now ask whether there is still value on the table or if the market is already pricing in future growth.

Most Popular Narrative: 10.8% Undervalued

With Cisco Systems closing at $79.2 against a widely followed fair value estimate of $88.81, the leading narrative focuses on how future cash flows could justify that gap.

The rapid acceleration in AI infrastructure investment, highlighted by record AI infrastructure orders from webscale/cloud customers (doubling targets to $2B in FY25) and continued strength in order pipeline, positions Cisco to benefit from surging demand for high-performance, AI-optimized networking hardware, which is expected to drive both revenue and margin expansion as next-generation networks scale globally.

Read the complete narrative.

Curious how that AI order book feeds into the $88.81 fair value? The narrative leans on steadier recurring revenue, firmer margins, and a specific earnings path that the current $79.2 price does not fully reflect.

Result: Fair Value of $88.81 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this hinges on Cisco managing rising component costs, as well as avoiding a slowdown in large AI infrastructure orders from a relatively small group of hyperscale customers.

Find out about the key risks to this Cisco Systems narrative.

Next Steps

Feeling torn between the bullish and cautious signals around Cisco? Take a closer look at the numbers now and decide where you land by weighing 4 key rewards and 1 important warning sign.

Ready to find your next idea?

If Cisco has sharpened your focus, do not stop here. Use this momentum to size up other opportunities now so you are not catching up later.

• Target stability by scanning companies with robust finances and low leverage through our solid balance sheet and fundamentals stocks screener (43 results).
• Hunt for potential mispriced opportunities by reviewing companies highlighted in our 52 high quality undervalued stocks.
• Prioritize consistent cash returns by checking companies featured in our 15 dividend fortresses.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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