CSCO
Cisco Systems, Inc.
Information Technology / Communications Equipment / San Jose, CA
AnalystScope signal
Sell
Scheduled quote
$111
Base fair value
$87
Bear / base / bull
$73 / $87 / $96
Upside / downside
-21.0 downside
Confidence
High
Research updated Apr 9, 2026
Daily scheduled refresh as of Jul 21, 2026, 6:05 AM UTC. Fresh through Jul 22, 2026, 6:05 AM UTC.
Informational research only. Not personalized investment advice.
Model vs published view
Current model signal differs from the latest published analyst rating.
Live current-price moves may be widening the gap versus the latest published view.
Investment summary
Current view and thesis
Cisco remains a quality cash compounder with a healthier software and services mix, but the valuation setup still looks more like a disciplined Hold than a wide-gap rerating case.
Fair value $87 vs. current $111 (-21.0 downside). Current base fair value is $87 versus $111, implying -21.0 downside.
Key drivers
A larger software and services mix helps stabilize the revenue base relative to prior hardware-heavy cycles.
High cash conversion and a strong balance sheet support downside resilience.
AI infrastructure and security attach can still provide selective incremental upside without changing the model philosophy.
Key risks
Enterprise spending hesitation could keep hardware demand softer for longer than the base case assumes.
Competitive pricing in networking and security could limit the margin benefit from a better mix.
If the software transition stalls, the current premium to slower-growth hardware peers could compress.
What would change the view
Broader evidence of sustained software and security acceleration would improve the setup.
A weaker enterprise hardware environment would make the current Hold harder to defend.
A wider discount to the current fair-value range would make the cash-yield story more attractive.
Valuation
Price, range, and method support
Base case $87 / -21.0 downside / high confidence
Price vs fair value
-21.4%
Model-implied return
Scheduled quote
$111
Fair value
$87
Valuation method stack
Weighted fair value $87
Published method weights
DCF (Base)
$90 | 45%
NTM P/E Multiple
$86 | 35%
EV/EBITDA Cross-check
$84 | 20%
| Case / method | Value | Weight / support |
|---|---|---|
| DCF (Base) | $90 | 45% |
| NTM P/E Multiple | $86 | 35% |
| EV/EBITDA Cross-check | $84 | 20% |
| Bear case | $73 | Supportive |
| Base case | $87 | Supportive |
| Bull case | $96 | Mixed |
Fundamental analysis
Reported evidence and normalized model base
Normalized annual basis: FY2025
Normalized figures are AnalystScope's annual valuation model base.
| Normalized metric | Latest value | Growth / margin context |
|---|---|---|
| Revenue | $55.6B | +3.3% YoY |
| Operating income | $15.3B | 27.5% margin |
| Net income | $11.6B | EPS proxy $2.96 |
| Free cash flow | $15.1B | 27.2% margin |
| EBITDA | $17.2B | 30.9% margin |
| Net cash / (debt) | $13.5B | +24.3% of revenue |
| Metric | Reported | AnalystScope normalized | Basis note |
|---|---|---|---|
| Revenue (TTM) | $56.7B | $55.6B | Model revenue smooths hardware digestion periods and keeps the base on steadier enterprise networking demand. |
| Operating Margin | 20.8% | 27.5% | Margin input avoids over-reading short-term product mix swings and restructuring timing. |
| FCF (TTM) | $13.3B | $15.1B | FCF input adjusts for working-capital timing while preserving Cisco's durable conversion advantage. |
| Net Cash / (Debt) | ($15.8B) | $13.5B | Balance-sheet treatment reflects excess liquidity conservatively without assuming all cash is immediately distributable. |
Fundamental snapshot
FY2025
Normalized annual model base
Revenue
+3.3% YoY
$55.6B
Op. margin
+0.4% pts
27.5%
FCF margin
+0.2% pts
27.2%
Revenue + margin trend
Annual normalized model-base history.
Revenue
Operating margin
AnalystScope annual model-base statements in USD across FY2023 | FY2024 | FY2025.
Income statement
| Line item | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Revenue | $57.0B | $53.8B | $55.6B |
| Gross Profit | $36.1B | $34.5B | $36.0B |
| Operating Income | $15.3B | $14.6B | $15.3B |
| EBITDA | $17.3B | $16.4B | $17.2B |
| Net Income | $11.1B | $10.9B | $11.6B |
Balance sheet
| Line item | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Cash & Investments | $24.0B | $25.0B | $26.0B |
| Total Debt | $11.5B | $12.0B | $12.5B |
| Net Cash / (Debt) | $12.5B | $13.0B | $13.5B |
| Total Assets | $101.0B | $104.0B | $108.0B |
| Total Liabilities | $55.0B | $56.0B | $58.0B |
| Shareholders' Equity | $46.0B | $48.0B | $50.0B |
Cash flow
| Line item | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Operating Cash Flow | $16.2B | $15.6B | $16.3B |
| Depreciation & Amortization | $2.0B | $1.8B | $1.9B |
| Capital Expenditures | ($1.1B) | ($1.1B) | ($1.2B) |
| Free Cash Flow | $15.1B | $14.5B | $15.1B |
Model assumptions
Base-case inputs and sensitivity
Published AnalystScope assumptions; private edits do not change this base case.
Revenue CAGR (5Y)
4.0%
+/- 1.0% => +/-$4/sh
Why this level: This is AnalystScope's base-case growth assumption, not a guarantee. It sits below the latest FY model-base revenue pace (2025.0%), so the model does not extend current strength too far into the outer years. Current company context: A larger software and services mix helps stabilize the revenue base relative to prior hardware-heavy cycles.
Terminal Growth
2.5%
+/- 0.5% => +/-$3/sh
Why this level: This is AnalystScope's mature long-run growth assumption, not a perpetual hypergrowth claim. At 2.5%, it sits well below the 4.0% five-year revenue CAGR, so the model steps down from the explicit forecast period to a steadier long-run pace. For Cisco Systems, Inc., that means a durable franchise can keep compounding after year five without assuming today's faster growth profile lasts indefinitely.
WACC
8.3%
+/- 0.5% => -$5/sh
Why this level: This is AnalystScope's base-case cost-of-capital judgment, not a precise CAPM output. It reflects the current rates backdrop, equity risk premium, and the company's balance-sheet posture. Cash-rich networking balance sheet
Operating Margin (Year 5)
28.5%
+/- 100 bps => +/-$3/sh
Why this level: This is AnalystScope's base-case margin view, not a promise of straight-line expansion. It keeps year-five margins close to today's model-base operating margin (27.5%), which implies the current margin structure is broadly durable. Margin input avoids over-reading short-term product mix swings and restructuring timing.
Sensitivity drivers
Revenue CAGR (5Y)
4.0%
+/- 1.0% => +/-$4/sh
Terminal Growth
2.5%
+/- 0.5% => +/-$3/sh
WACC
8.3%
+/- 0.5% => -$5/sh
Operating Margin (Year 5)
28.5%
+/- 100 bps => +/-$3/sh
Confidence
High
Method outputs are tightly grouped at +6.9% dispersion.
Why the model view could be wrong
Enterprise spending hesitation could keep hardware demand softer for longer than the base case assumes.
Competitive pricing in networking and security could limit the margin benefit from a better mix.
If the software transition stalls, the current premium to slower-growth hardware peers could compress.
Private analysis
Test your own assumptions in Scenario Builder
Private scenarios remain separate from AnalystScope's published base case.
Private workspace
Scenario Builder
Private scenario sandbox
This is a private modelling layer, not the public AnalystScope base case or printable snapshot. It keeps the public base case as the anchor, applies bounded changes to the four core valuation inputs, and updates your scenario fair-value estimate immediately.
Saved scenarios currently stay local to this browser for CSCO. Base-case rationale remains in the public assumptions section above. Your scenario output reprices the published valuation methods from projected operating anchors when those anchors are available, while keeping market-multiple and capital-structure assumptions anchored to the AnalystScope framework.
Editable assumptions
Adjust your scenario inputs within the displayed plausible range for this company. The workbench stays anchored to the public AnalystScope base case.
This is a bounded scenario tool, not a free-form spreadsheet. Values outside the displayed range snap back to the nearest allowed value when you leave the field.
Matches the published AnalystScope base case.
Revenue CAGR (5Y)
Public AnalystScope base case: 4.0% | +/- 1.0% => +/-$4/sh
Allowed range: 0.0% to 10.0%
Terminal Growth
Public AnalystScope base case: 2.5% | +/- 0.5% => +/-$3/sh
Allowed range: 1.0% to 4.0%
WACC
Public AnalystScope base case: 8.3% | +/- 0.5% => -$5/sh
Allowed range: 6.3% to 10.3%
Operating Margin (Year 5)
Public AnalystScope base case: 28.5% | +/- 100 bps => +/-$3/sh
Allowed range: 20.5% to 36.5%
Saved private scenarios
Save up to 5 named scenarios for CSCO. These are your scenarios: they never overwrite the public AnalystScope base case and remain clearly separate from public research.
Checking private workspace session...
Private scenario note
Keep a short thesis, main risk, or why this case differs from the published base case.
0 / 280
Notes stay local to this browser unless you sign in to the private workspace, and they never appear as published AnalystScope research.
No private scenarios saved yet. Make a change to the published base case, then save a named scenario here.
Published base case
Fair value
$87
Upside / Downside
-21.0 downside
Model signal
Sell
Published base-case output
Scenario output reprices the published DCF and multiple methods from projected year-5 revenue, margin, free cash flow, EBITDA, and EPS anchors. Market multiples and capital structure stay anchored to the published base framework.
Fair value
$87
$0/sh vs published base case
Upside / Downside
-21.0 downside
+0.0 pts vs published base case
Model signal
Sell
Unchanged versus the published base case.
Method movement inside the scenario
This breakdown shows what moved inside the published valuation framework when you edit the scenario. The published AnalystScope base case stays anchored, and any method without a clean projected anchor remains pinned to that framework.
Method rows below reflect the current edited scenario state, not just the saved scenario snapshots.
Influence tags are directional rather than exact attribution. They estimate which edited input is moving each method most by reverting one assumption at a time while the other edited inputs stay in place.
| Method | Published base | Edited scenario | Delta | How it moved / main drivers |
|---|---|---|---|---|
DCF (Base) DCF-style | 45% weight | $90 | $90 | $0/sh | Base-aligned This method is supported by the model-native bridge and currently stays aligned with the published base case. Edited inputs are largely offsetting each other, so this row stays close to the published base case. |
NTM P/E Multiple P/E-style | 35% weight | $86 | $86 | $0/sh | Base-aligned This method is supported by the model-native bridge and currently stays aligned with the published base case. Edited inputs are largely offsetting each other, so this row stays close to the published base case. |
EV/EBITDA Cross-check EV-based multiple | 20% weight | $84 | $84 | $0/sh | Base-aligned This method is supported by the model-native bridge and currently stays aligned with the published base case. Edited inputs are largely offsetting each other, so this row stays close to the published base case. |
Weighted fair value Published framework result | Published framework result | $87 | $87 | +$0/sh | Moved Combines the repriced method outputs using the published AnalystScope weights. No single edited assumption is dominating this move in a material way. |
Published base case vs private scenarios
Compare the published AnalystScope base case against your saved private scenarios in one view. Saved scenarios remain local to this browser, and the table below reflects saved snapshots rather than any unsaved edits currently sitting in the editor.
Fair-value comparisons use the same workbench recalculation path as the editor above.
Published base case stays pinned as the anchor row.
| Scenario | Revenue CAGR (5Y) | Terminal Growth | WACC | Op. Margin (Y5) | Fair Value | Upside / Downside | Model Signal | Delta vs Base | Action |
|---|---|---|---|---|---|---|---|---|---|
AnalystScope base case PublishedOfficial AnalystScope anchor row. | 4.0% | 2.5% | 8.3% | 28.5% | $87 | -21.0 downside | Sell | Published anchor |
Supporting research
Quality, normalization, and monitoring evidence
Annual model base: FY2023 | FY2024 | FY2025
Thesis scorecard
Growth
ModerateGrowth is steadier than fast, with software mix doing more work than hardware volume.
Profitability
StrongMargins and free-cash-flow conversion remain solid for the category.
Balance sheet
StrongNet cash gives Cisco more flexibility than many hardware peers.
Valuation
ModerateThe multiple is reasonable, but the fair-value spread is still fairly contained.
Execution / Resilience
StrongInstalled base and enterprise relationships support resilience.
Current source status
Quote: Daily scheduled refresh as of Jul 21, 2026, 6:05 AM UTC. Fresh through Jul 22, 2026, 6:05 AM UTC.
Reported fundamentals: Fundamentals refreshed 21 Jul 2026, 00:39 UTC. Fresh through 21 Jul 2026, 12:39 UTC.
Latest filing: 4 filed Jul 13, 2026 | Reporting period Jul 10, 2026. Filing refreshed Jul 21, 2026, 12:39 AM UTC. Fresh through Jul 21, 2026, 12:39 PM UTC.
Annual model-base income-statement, cash-flow, and balance-sheet metrics, plus cross-statement quality relationships with compact prior-FY direction cues, derived from the curated statement backbone.
Basis: FY2023 | FY2024 | FY2025. Live reported fundamentals remain available in the reconciliation section.
Operating and cash-flow trends
Revenue growth (1Y)
+3.3%
Gross margin
64.7%
Operating margin
27.5%
Operating margin change vs prior FY
+0.4 pts
EBITDA margin
30.9%
EBITDA margin change vs prior FY
+0.5 pts
Operating income growth (1Y)
+4.8%
Net margin
20.9%
FCF margin
27.2%
FCF margin change vs prior FY
+0.2 pts
FCF growth (1Y)
+4.1%
Balance sheet quality
Cash & investments
$26.0B
Total debt
$12.5B
Net cash / (debt)
Net cash $13.5B
Net cash / (debt) as % of revenue
Net cash 24.3% of revenue
Liabilities / assets
vs FY2024 (-0.1 pts)
53.7%
Cross-statement quality
Gross-to-operating spread
37.2 pts
Operating cash flow / net income
vs FY2024 (-0.0x)
1.4x
Operating cash flow / EBITDA
vs FY2024 (-0.0x)
0.9x
Free cash flow / net income
vs FY2024 (-0.0x)
1.3x
CapEx as % of revenue
vs FY2024 (+0.1 pts)
2.2%
CapEx as % of operating cash flow
vs FY2024 (+0.3 pts)
7.4%
CapEx / D&A
vs FY2024 (+0.0x)
0.6x
Cash & investments / total debt
vs FY2024 (-0.0x)
2.1x
Shareholders' equity as % of revenue
89.9%
Asset turnover
vs FY2024 (-0.0x)
0.5x
Compact model-base diagnostics for analyst triage, highlighting where the durable valuation base is diverging most clearly from the latest reported picture.
Adjustment focus
Large analyst adjustmentBalance sheet | Net Cash / (Debt) | +$29.3B / +52% of revenue
Revenue momentum
Improving+3.3% latest 1Y growth
vs -5.6% prior 1Y
Operating margin trend
Stable27.5% latest margin
+38 bps vs prior FY
FCF margin trend
Stable27.2% latest FCF margin
+21 bps vs prior FY
Balance-sheet posture
StableNet cash 24.3% of revenue
vs Net cash 24.2% of revenue prior FY
How to read this
Reported = the latest company-reported figure. Model base = AnalystScope's comparable operating base used for valuation and thesis work. It may include standardization, conservative balance-sheet treatment, working-capital cleanup, and through-cycle adjustments when current reported numbers do not look durable.
This is an analyst model base, not a claim of perfect adjusted truth. Larger gaps can reflect deliberate cyclical or base-case adjustments, not just light accounting cleanup.
Why the model base differs
For Cisco, the model base aims to capture durable infrastructure and software economics rather than quarter-specific hardware digestion noise.
Rows are sorted by largest comparable adjustment first.
| Metric | Model base | Live reported | Variance vs reported | Adjustment size | Why lower / higher? |
|---|---|---|---|---|---|
Net Cash / (Debt) | $13.5B FY2025 model base | ($15.8B) Live reported balance sheet | +$29.3B / +52% of revenue | Large analyst adjustment | Model base is less conservative than the live reported balance-sheet figure because the latest reported balance does not appear fully representative. It reflects excess liquidity conservatively without assuming all cash is immediately distributable. |
FCF (TTM) | $15.1B FY2025 model base | $13.3B Live reported TTM | +$1.8B / +14% | Moderate adjustment | Model base is higher than live reported because the model does not assume the latest cash-flow drag is fully durable. It adjusts for working-capital timing while preserving Cisco's durable conversion advantage. |
Operating Margin | 27.5% FY2025 model base | 20.8% Live reported margin | +6.7 pts | Large analyst adjustment | Model base is higher than live reported because the model does not assume the latest reported margin pressure is the durable earnings base. It avoids over-reading short-term product mix swings and restructuring timing. |
Revenue (TTM) | $55.6B FY2025 model base | $56.7B Live reported TTM | -$1.1B / -2% | Close to reported | Model base is lower than live reported because the thesis does not carry the current revenue run-rate straight into the durable operating base. It smooths hardware digestion periods and keeps the base on steadier enterprise networking demand. |
Near-term catalysts
Order trends and backlog normalization remain the cleanest near-term read-throughs.
Security and subscription commentary matter more than hardware units alone in the current setup.
Capital allocation updates can reinforce the downside floor if execution stays steady.
What we are watching
Whether software and services are doing enough to offset slower hardware replacement demand.
How resilient Cisco's margin base remains if enterprise budgets stay tighter.
Any sign that the current cash-rich balance sheet is becoming more aggressively deployed.
| Date | Event | Published rating | Note |
|---|---|---|---|
| Apr 9, 2026 | New | Hold | Started coverage with a Hold view on solid cash generation and a narrower valuation spread. |