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 in the Americas, Europe, the Middle East, Africa, the Asia Pacific, Japan, and China.


Snowflake Analysis

Adequate balance sheet and fair value.


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

-6.3%

CSCO

-1.1%

US Communications

-1.1%

US Market


1 Year Return

-13.4%

CSCO

-8.7%

US Communications

17.8%

US Market

Return vs Industry: CSCO exceeded the US Communications industry which returned -8.7% over the past year.

Return vs Market: CSCO underperformed the US Market which returned 17.8% over the past year.


Shareholder returns

CSCOIndustryMarket
7 Day-6.3%-1.1%-1.1%
30 Day-9.9%-4.9%1.5%
90 Day-2.9%1.8%6.6%
1 Year-11.0%-13.4%-6.8%-8.7%20.2%17.8%
3 Year40.8%28.4%30.6%22.3%47.5%38.1%
5 Year70.6%45.7%57.6%39.9%71.2%52.4%

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?

16.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CSCO ($46.3) is trading below our estimate of fair value ($52.61)

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 (17.9x) compared to the Communications industry average (24.7x).

PE vs Market: CSCO is good value based on its PE Ratio (17.9x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: CSCO is poor value based on its PEG Ratio (3.7x)


Price to Book Ratio

PB vs Industry: CSCO is overvalued based on its PB Ratio (5.5x) compared to the US Communications industry average (1.9x).


Next Steps

Future Growth

How is Cisco Systems forecast to perform in the next 1 to 3 years based on estimates from 24 analysts?

4.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CSCO's forecast earnings growth (4.8% per year) is above the savings rate (1.7%).

Earnings vs Market: CSCO's earnings (4.8% per year) are forecast to grow slower than the US market (14.1% per year).

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

Revenue vs Market: CSCO's revenue (2.2% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: CSCO's revenue (2.2% 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 (35.7%)


Next Steps

Past Performance

How has Cisco Systems performed over the past 5 years?

-2.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CSCO has high quality earnings.

Growing Profit Margin: CSCO's current net profit margins (21.4%) are lower than last year (25.1%).


Past Earnings Growth Analysis

Earnings Trend: CSCO's earnings have declined by -2.5% per year over the past 5 years.

Accelerating Growth: CSCO's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CSCO had negative earnings growth (-13.2%) over the past year, making it difficult to compare to the Communications industry average (-19.9%).


Return on Equity

High ROE: CSCO's Return on Equity (31.1%) 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 ($40.1B) exceed its short term liabilities ($22.1B).

Long Term Liabilities: CSCO's short term assets ($40.1B) exceed its long term liabilities ($32.8B).


Debt to Equity History and Analysis

Debt Level: CSCO's debt to equity ratio (45%) is considered high.

Reducing Debt: CSCO's debt to equity ratio has increased from 35.5% to 45% over the past 5 years.

Debt Coverage: CSCO's debt is well covered by operating cash flow (97.9%).

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 2.5x debt).


Next Steps

Dividend

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

3.18%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Cisco Systems before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company3.2%marketbottom25%1.4%markettop25%3.7%industryaverage3.0%forecastin3Years3.3%

Current dividend yield vs market & industry

Notable Dividend: CSCO's dividend (3.02%) is higher than the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: CSCO's dividend (3.02%) is low compared to the top 25% of dividend payers in the US market (3.73%).


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 reasonable payout ratio (54.2%), CSCO's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CSCO's dividends in 3 years are forecast to be well covered by earnings (43.7% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.3yrs

Average management tenure


CEO

Chuck Robbins (53yo)

4.6yrs

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 ($USD25.83M) is above average for companies of similar size in the US market ($USD10.81M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Charles Robbins
Chairman & CEO4.6yrsUS$25.83m0.0012% $2.2m
Kelly Kramer
Executive VP & CFO5.1yrsUS$13.63m0.0054% $10.1m
Geraldine Elliott
Executive VP and Chief Sales & Marketing Officer1.8yrsUS$12.94m0.00093% $1.7m
David Goeckeler
Executive VP and GM of Networking & Security Business3.9yrsUS$12.33m0.0014% $2.5m
Maria Martinez
Executive VP & Chief Customer Experience Officer1.8yrsUS$14.98m0.00076% $1.4m
Tiang Yew Tan
Executive VP & Chief Operating Officer2.1yrsno data0.00017% $317.2k
Prat Bhatt
Chief Accounting Officer10.6yrsno data0.00049% $914.3k
Jacqueline Guichelaar
Group Chief Information Officer0yrsno datano data
Marilyn Mora
Director of Global Investor Relations0yrsno datano data
Mark Chandler
Executive VP14yrsno data0.0046% $8.6m

4.3yrs

Average Tenure

55yo

Average Age

Experienced Management: CSCO's management team is considered experienced (4.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Charles Robbins
Chairman & CEO4.6yrsUS$25.83m0.0012% $2.2m
Michael Capellas
Lead Independent Director1.2yrsUS$383.96k0.0034% $6.4m
John Morgridge
Chairman Emeritus13.3yrsno datano data
Arun Sarin
Independent Director10.4yrsUS$340.96kno data
Abraham Peled
Chairman of Cisco’s SPVSS Business0.8yrsno datano data
Martha Burns
Independent Director16.3yrsUS$362.96k0.0017% $3.2m
Steven West
Independent Director23.8yrsUS$354.96k0.00097% $1.8m
Roderick McGeary
Independent Director16.6yrsUS$380.96k0.0014% $2.6m
Mark Garrett
Independent Director1.8yrsUS$365.96k0.00033% $615.8k
Kristina Johnson
Independent Director7.5yrsUS$326.96k0.00037% $690.4k

9.0yrs

Average Tenure

63.5yo

Average Age

Experienced Board: CSCO's board of directors are considered experienced (9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

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$186.599b
  • 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
CSCONasdaqGS (Nasdaq Global Select)YesCommon SharesUSUSDFeb 1990
CSCO *BMV (Bolsa Mexicana de Valores)YesCommon SharesMXMXNFeb 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
CISXTRA (XETRA Trading Platform)YesCommon SharesDEEURFeb 1990
CSCOSNSE (Santiago Stock Exchange)YesCommon SharesCLUSDFeb 1990
CSCOBVL (Bolsa de Valores de Lima)YesCommon SharesPEUSDFeb 1990
CIS-UETLX (Eurotlx)YesCommon SharesITEURFeb 1990
CSCOWBAG (Wiener Boerse AG)YesCommon SharesATEURFeb 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 in the Americas, Europe, the Middle East, Africa, the Asia Pacific, Japan, and China. It provides infrastructure platforms, including networking technologies of switching, routing, wireless, and data center products that are designed to work together to deliver networking capabilities, and transport and/or store data. The company also offers collaboration products comprising unified communications, Cisco TelePresence, and conferencing, as well as the Internet of Things and analytics software. In addition, it provides security products, such as network security, cloud and email security, identity and access management, advanced threat protection, and unified threat management products; and cloud and system management products. Further, the company offers a range of service and support options for its customers, including technical support and advanced 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. was founded in 1984 and is headquartered in San Jose, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/24 23:58
End of Day Share Price2020/02/24 00:00
Earnings2020/01/25
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.