NasdaqGS:CSCO

Stock Analysis Report

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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. More Details

Rewards

Trading at 41.8% below our estimate of its fair value

Earnings are forecast to grow 5% per year

Pays a reliable dividend of 3.69%

Risk Analysis

No risks detected for CSCO from our risk checks.


Snowflake Analysis

Flawless balance sheet established dividend payer.


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

2.0%

CSCO

2.1%

US Communications

2.3%

US Market


1 Year Return

-16.1%

CSCO

-13.5%

US Communications

17.2%

US Market

Return vs Industry: CSCO underperformed the US Communications industry which returned -13.5% over the past year.

Return vs Market: CSCO underperformed the US Market which returned 17.2% over the past year.


Shareholder returns

CSCOIndustryMarket
7 Day2.0%2.1%2.3%
30 Day-7.5%-8.5%-4.6%
90 Day-14.4%-12.2%7.4%
1 Year-13.4%-16.1%-11.2%-13.5%19.8%17.2%
3 Year26.8%16.8%13.5%6.4%37.4%28.3%
5 Year65.1%41.8%40.3%25.3%83.8%63.0%

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?

41.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CSCO ($39.06) is trading below our estimate of fair value ($67.13)

Significantly Below Fair Value: CSCO is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: CSCO is good value based on its PE Ratio (14.8x) compared to the US Communications industry average (37.6x).

PE vs Market: CSCO is good value based on its PE Ratio (14.8x) compared to the US market (17.9x).


Price to Earnings Growth Ratio

PEG Ratio: CSCO is poor value based on its PEG Ratio (2.9x)


Price to Book Ratio

PB vs Industry: CSCO is overvalued based on its PB Ratio (4.4x) 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 25 analysts?

5.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CSCO's forecast earnings growth (5% per year) is above the savings rate (2.2%).

Earnings vs Market: CSCO's earnings (5% per year) are forecast to grow slower than the US market (22.1% per year).

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

Revenue vs Market: CSCO's revenue (2.1% per year) is forecast to grow slower than the US market (9.9% per year).

High Growth Revenue: CSCO's revenue (2.1% 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 (27.4%)


Next Steps

Past Performance

How has Cisco Systems performed over the past 5 years?

1.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CSCO has high quality earnings.

Growing Profit Margin: CSCO's current net profit margins (22.7%) are higher than last year (22.4%).


Past Earnings Growth Analysis

Earnings Trend: CSCO's earnings have grown by 1.1% 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 (-3.6%) over the past year, making it difficult to compare to the Communications industry average (-28.9%).


Return on Equity

High ROE: CSCO's Return on Equity (29.6%) is considered high.


Next Steps

Financial Health

How is Cisco Systems's financial position?


Financial Position Analysis

Short Term Liabilities: CSCO's short term assets ($43.6B) exceed its short term liabilities ($25.3B).

Long Term Liabilities: CSCO's short term assets ($43.6B) exceed its long term liabilities ($31.6B).


Debt to Equity History and Analysis

Debt Level: CSCO's debt to equity ratio (38.5%) is considered satisfactory.

Reducing Debt: CSCO's debt to equity ratio has reduced from 42.4% to 38.5% over the past 5 years.

Debt Coverage: CSCO's debt is well covered by operating cash flow (105.8%).

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


Balance Sheet


Next Steps

Dividend

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

3.69%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: CSCO's dividend (3.69%) is higher than the bottom 25% of dividend payers in the US market (1.72%).

High Dividend: CSCO's dividend (3.69%) is low compared to the top 25% of dividend payers in the US market (4.89%).


Stability and Growth of Payments

Stable Dividend: CSCO's dividends per share have been stable in the past 10 years.

Growing Dividend: CSCO's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (53.6%), 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 (46% payout ratio).


Next Steps

Management

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

2.5yrs

Average management tenure


CEO

Chuck Robbins (54 yo)

5.17yrs

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. He has been on Board o ...


CEO Compensation Analysis

Compensation vs Market: Chuck's total compensation ($USD25.83M) is above average for companies of similar size in the US market ($USD11.35M).

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 & CEO5.17yrsUS$25.83m0.0011%
$ 1.9m
Kelly Kramer
Executive VP & CFO5.67yrsUS$13.63m0.0026%
$ 4.3m
Geraldine Elliott
Executive VP and Chief Sales & Marketing Officer2.42yrsUS$12.94m0.0018%
$ 3.0m
Maria Martinez
Executive VP & Chief Customer Experience Officer2.42yrsUS$14.98m0.0010%
$ 1.7m
Tiang Yew Tan
Executive VP & Chief of Operations2.67yrsno data0.00019%
$ 314.2k
Prat Bhatt
Chief Accounting Officer11.17yrsno data0.0019%
$ 3.2m
Roland Acra
Senior VP & CTO0.17yrno datano data
Jacqueline Guichelaar
Senior VP & Group Chief Information Officer1.5yrsno datano data
Marilyn Mora
Director of Global Investor Relationsno datano datano data
Mark Chandler
Executive VP8.33yrsno data0.0056%
$ 9.3m
Stella Low
Chief Communications Officerno datano datano data
Derek Idemoto
Senior Vice President of Corporate Development & Cisco Investments0.33yrno datano data

2.5yrs

Average Tenure

54yo

Average Age

Experienced Management: CSCO's management team is considered experienced (2.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Charles Robbins
Chairman & CEO5.17yrsUS$25.83m0.0011%
$ 1.9m
Michael Capellas
Lead Independent Director1.75yrsUS$383.96k0.0034%
$ 5.7m
John Morgridge
Chairman Emeritus13.83yrsno datano data
Arun Sarin
Independent Director11yrsUS$340.96kno data
Abraham Peled
Chairman of Cisco’s SPVSS Business1.42yrsno datano data
Martha Burns
Independent Director16.83yrsUS$362.96k0.0017%
$ 2.8m
Roderick McGeary
Independent Director17.17yrsUS$380.96k0.0012%
$ 2.0m
Mark Garrett
Independent Director2.42yrsUS$365.96k0.00033%
$ 545.7k
Kristina Johnson
Independent Director8.08yrsUS$326.96k0.00037%
$ 611.8k
Wesley Bush
Independent Director1.33yrsUS$170.55k0.00024%
$ 396.9k
Brenton Saunders
Independent Director3.5yrsUS$322.96k0.000010%
$ 16.5k
Lisa Su
Director0.67yrno data0.00014%
$ 231.5k

3.1yrs

Average Tenure

62.5yo

Average Age

Experienced Board: CSCO's board of directors are considered experienced (3.1 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$165.358b
  • Shares outstanding: 4.23b
  • 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
0R0KLSE (London Stock Exchange)YesCommon SharesGBCHFFeb 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 Mid ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/09/30 00:27
End of Day Share Price2020/09/29 00:00
Earnings2020/07/25
Annual Earnings2020/07/25


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.