CISCO SYSTEMS INC (CSCO)
US17275R1023 - Common Stock
Taking everything into account, CSCO scores 6 out of 10 in our fundamental rating. CSCO was compared to 54 industry peers in the Communications Equipment industry. CSCO scores excellent on profitability, but there are some minor concerns on its financial health. CSCO has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year CSCO was profitable.
CSCO had a positive operating cash flow in the past year.
CSCO had positive earnings in each of the past 5 years.
In the past 5 years CSCO always reported a positive cash flow from operatings.
1.2 Ratios
CSCO's Return On Assets of 9.85% is amongst the best of the industry. CSCO outperforms 92.59% of its industry peers.
With an excellent Return On Equity value of 26.47%, CSCO belongs to the best of the industry, outperforming 92.59% of the companies in the same industry.
The Return On Invested Capital of CSCO (12.73%) is better than 90.74% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CSCO is significantly above the industry average of 9.46%.
The 3 year average ROIC (16.86%) for CSCO is well above the current ROIC(12.73%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.85% | ||
| ROE | 26.47% | ||
| ROIC | 12.73% |
ROA(3y)11.94%
ROA(5y)11.9%
ROE(3y)27.93%
ROE(5y)29.6%
ROIC(3y)16.86%
ROIC(5y)16.82%
1.3 Margins
CSCO has a better Profit Margin (21.88%) than 98.15% of its industry peers.
CSCO's Profit Margin has improved in the last couple of years.
The Operating Margin of CSCO (26.58%) is better than 98.15% of its industry peers.
In the last couple of years the Operating Margin of CSCO has remained more or less at the same level.
Looking at the Gross Margin, with a value of 64.65%, CSCO belongs to the top of the industry, outperforming 88.89% of the companies in the same industry.
In the last couple of years the Gross Margin of CSCO has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.58% | ||
| PM (TTM) | 21.88% | ||
| GM | 64.65% |
OM growth 3Y-1.47%
OM growth 5Y1.2%
PM growth 3Y-0.91%
PM growth 5Y150.81%
GM growth 3Y-0.8%
GM growth 5Y0.22%
2. Health
2.1 Basic Checks
CSCO has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
CSCO has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, CSCO has less shares outstanding
The debt/assets ratio for CSCO has been reduced compared to a year ago.
2.2 Solvency
CSCO has an Altman-Z score of 2.26. This is not the best score and indicates that CSCO is in the grey zone with still only limited risk for bankruptcy at the moment.
CSCO has a Altman-Z score of 2.26. This is in the better half of the industry: CSCO outperforms 75.93% of its industry peers.
The Debt to FCF ratio of CSCO is 2.58, which is a good value as it means it would take CSCO, 2.58 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of CSCO (2.58) is better than 70.37% of its industry peers.
A Debt/Equity ratio of 0.70 indicates that CSCO is somewhat dependend on debt financing.
The Debt to Equity ratio of CSCO (0.70) is worse than 74.07% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | 2.58 | ||
| Altman-Z | 2.26 |
ROIC/WACC1.38
WACC9.21%
2.3 Liquidity
A Current Ratio of 0.89 indicates that CSCO may have some problems paying its short term obligations.
CSCO has a worse Current ratio (0.89) than 88.89% of its industry peers.
CSCO has a Quick Ratio of 0.89. This is a bad value and indicates that CSCO is not financially healthy enough and could expect problems in meeting its short term obligations.
CSCO has a Quick ratio of 0.82. This is in the lower half of the industry: CSCO underperforms 77.78% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.82 |
3. Growth
3.1 Past
CSCO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.04%, which is quite good.
CSCO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.34% yearly.
CSCO shows a small growth in Revenue. In the last year, the Revenue has grown by 0.85%.
CSCO shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.93% yearly.
EPS 1Y (TTM)12.04%
EPS 3Y6.63%
EPS 5Y8.34%
EPS Q2Q%-12%
Revenue 1Y (TTM)0.85%
Revenue growth 3Y4.95%
Revenue growth 5Y2.93%
Sales Q2Q%-12.83%
3.2 Future
The Earnings Per Share is expected to grow by 3.87% on average over the next years.
CSCO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.01% yearly.
EPS Next Y-2.6%
EPS Next 2Y-3.4%
EPS Next 3Y0.39%
EPS Next 5Y3.87%
Revenue Next Year-5.51%
Revenue Next 2Y-1.02%
Revenue Next 3Y0.46%
Revenue Next 5Y2.01%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 11.42 indicates a reasonable valuation of CSCO.
83.33% of the companies in the same industry are more expensive than CSCO, based on the Price/Earnings ratio.
CSCO's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.66.
Based on the Price/Forward Earnings ratio of 12.62, the valuation of CSCO can be described as correct.
Based on the Price/Forward Earnings ratio, CSCO is valued a bit cheaper than 61.11% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 20.15. CSCO is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.42 | ||
| Fwd PE | 12.62 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CSCO is valued cheaper than 81.48% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CSCO indicates a somewhat cheap valuation: CSCO is cheaper than 77.78% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.83 | ||
| EV/EBITDA | 10.43 |
4.3 Compensation for Growth
CSCO has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.37
EPS Next 2Y-3.4%
EPS Next 3Y0.39%
5. Dividend
5.1 Amount
CSCO has a Yearly Dividend Yield of 3.51%.
CSCO's Dividend Yield is rather good when compared to the industry average which is at 9.31. CSCO pays more dividend than 88.89% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.39, CSCO pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.51% |
5.2 History
The dividend of CSCO has a limited annual growth rate of 4.39%.
CSCO has been paying a dividend for at least 10 years, so it has a reliable track record.
CSCO has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)4.39%
Div Incr Years12
Div Non Decr Years12
5.3 Sustainability
52.55% of the earnings are spent on dividend by CSCO. This is a bit on the high side, but may be sustainable.
The dividend of CSCO is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP52.55%
EPS Next 2Y-3.4%
EPS Next 3Y0.39%
CISCO SYSTEMS INC
NASDAQ:CSCO (6/17/2024, 7:00:00 PM)
After market: 45.67 -0.02 (-0.04%)45.69
+0.01 (+0.02%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap184.08B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.51% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
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Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.42 | ||
| Fwd PE | 12.62 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)1.37
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.85% | ||
| ROE | 26.47% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 26.58% | ||
| PM (TTM) | 21.88% | ||
| GM | 64.65% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.45
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.82 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)12.04%
EPS 3Y6.63%
EPS 5Y
EPS Q2Q%
EPS Next Y-2.6%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)0.85%
Revenue growth 3Y4.95%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y