CISCO SYSTEMS INC (CSCO) Stock Fundamental Analysis
USA - NASDAQ:CSCO - US17275R1023 - Common Stock
73.11 USD
+0.2 (+0.27%)
73.1 USD
-0.01 (-0.01%)
Taking everything into account, CSCO scores 6 out of 10 in our fundamental rating. CSCO was compared to 48 industry peers in the Communications Equipment industry. While CSCO belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. CSCO is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
CSCO had positive earnings in the past year.
CSCO had a positive operating cash flow in the past year.
In the past 5 years CSCO has always been profitable.
In the past 5 years CSCO always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 8.32%, CSCO is doing good in the industry, outperforming 79.17% of the companies in the same industry.
With an excellent Return On Equity value of 21.73%, CSCO belongs to the best of the industry, outperforming 87.50% of the companies in the same industry.
The Return On Invested Capital of CSCO (11.70%) is better than 83.33% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CSCO is in line with the industry average of 12.95%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.32% | ||
| ROE | 21.73% | ||
| ROIC | 11.7% |
ROA(3y)9.67%
ROA(5y)10.49%
ROE(3y)24.29%
ROE(5y)25.65%
ROIC(3y)14.02%
ROIC(5y)15.13%
1.3 Margins
CSCO has a better Profit Margin (17.97%) than 91.67% of its industry peers.
In the last couple of years the Profit Margin of CSCO has declined.
CSCO's Operating Margin of 22.09% is amongst the best of the industry. CSCO outperforms 91.67% of its industry peers.
CSCO's Operating Margin has declined in the last couple of years.
The Gross Margin of CSCO (64.94%) is better than 89.58% of its industry peers.
CSCO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.09% | ||
| PM (TTM) | 17.97% | ||
| GM | 64.94% |
OM growth 3Y-6.7%
OM growth 5Y-5.03%
PM growth 3Y-7.78%
PM growth 5Y-4.61%
GM growth 3Y1.26%
GM growth 5Y0.21%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so CSCO is still creating some value.
Compared to 1 year ago, CSCO has less shares outstanding
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 3.09. This indicates that CSCO is financially healthy and has little risk of bankruptcy at the moment.
CSCO has a Altman-Z score of 3.09. This is in the better half of the industry: CSCO outperforms 64.58% of its industry peers.
The Debt to FCF ratio of CSCO is 2.11, which is a good value as it means it would take CSCO, 2.11 years of fcf income to pay off all of its debts.
CSCO has a better Debt to FCF ratio (2.11) than 60.42% of its industry peers.
A Debt/Equity ratio of 0.56 indicates that CSCO is somewhat dependend on debt financing.
CSCO's Debt to Equity ratio of 0.56 is on the low side compared to the rest of the industry. CSCO is outperformed by 77.08% of its industry peers.
Even though the debt/equity ratio score it not favorable for CSCO, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.56 | ||
| Debt/FCF | 2.11 | ||
| Altman-Z | 3.09 |
ROIC/WACC1.29
WACC9.07%
2.3 Liquidity
CSCO has a Current Ratio of 1.00. 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's Current ratio of 1.00 is on the low side compared to the rest of the industry. CSCO is outperformed by 89.58% of its industry peers.
A Quick Ratio of 0.91 indicates that CSCO may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.91, CSCO is doing worse than 79.17% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1 | ||
| Quick Ratio | 0.91 |
3. Growth
3.1 Past
CSCO shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 1.88%.
The Earnings Per Share has been growing slightly by 3.50% on average over the past years.
The Revenue has been growing slightly by 5.30% in the past year.
Measured over the past years, CSCO shows a small growth in Revenue. The Revenue has been growing by 2.82% on average per year.
EPS 1Y (TTM)1.88%
EPS 3Y4.19%
EPS 5Y3.5%
EPS Q2Q%13.79%
Revenue 1Y (TTM)5.3%
Revenue growth 3Y3.19%
Revenue growth 5Y2.82%
Sales Q2Q%7.56%
3.2 Future
CSCO is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.38% yearly.
CSCO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.95% yearly.
EPS Next Y8.49%
EPS Next 2Y8.04%
EPS Next 3Y7.97%
EPS Next 5Y8.38%
Revenue Next Year5.35%
Revenue Next 2Y4.98%
Revenue Next 3Y4.85%
Revenue Next 5Y4.95%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
CSCO is valuated rather expensively with a Price/Earnings ratio of 19.24.
Based on the Price/Earnings ratio, CSCO is valued a bit cheaper than 70.83% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.10. CSCO is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 17.73, the valuation of CSCO can be described as rather expensive.
Based on the Price/Forward Earnings ratio, CSCO is valued a bit cheaper than 75.00% of the companies in the same industry.
CSCO is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.52, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.24 | ||
| Fwd PE | 17.73 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CSCO is valued a bit cheaper than 66.67% 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 70.83% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.75 | ||
| EV/EBITDA | 18.85 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of CSCO may justify a higher PE ratio.
PEG (NY)2.27
PEG (5Y)5.5
EPS Next 2Y8.04%
EPS Next 3Y7.97%
5. Dividend
5.1 Amount
CSCO has a Yearly Dividend Yield of 2.33%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.51, CSCO pays a better dividend. On top of this CSCO pays more dividend than 87.50% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.35, CSCO has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.33% |
5.2 History
The dividend of CSCO has a limited annual growth rate of 2.65%.
CSCO has paid a dividend for at least 10 years, which is a reliable track record.
CSCO has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)2.65%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
63.23% of the earnings are spent on dividend by CSCO. This is not a sustainable payout ratio.
The dividend of CSCO is growing, but earnings are growing more, so the dividend growth is sustainable.
DP63.23%
EPS Next 2Y8.04%
EPS Next 3Y7.97%
73.11
+0.2 (+0.27%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners80.81%
Inst Owner Change-0.32%
Ins Owners0.05%
Ins Owner Change3.56%
Market Cap289.02B
Revenue(TTM)56.65B
Net Income(TTM)10.18B
Analysts77.5
Price Target77.48 (5.98%)
Short Float %1.2%
Short Ratio2.59
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.33% |
Yearly Dividend1.62
Dividend Growth(5Y)2.65%
DP63.23%
Div Incr Years13
Div Non Decr Years13
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.01%
Min EPS beat(2)-0.5%
Max EPS beat(2)2.52%
EPS beat(4)3
Avg EPS beat(4)1.46%
Min EPS beat(4)-0.5%
Max EPS beat(4)2.52%
EPS beat(8)7
Avg EPS beat(8)2.32%
EPS beat(12)11
Avg EPS beat(12)2.22%
EPS beat(16)12
Avg EPS beat(16)1.69%
Revenue beat(2)0
Avg Revenue beat(2)-1.53%
Min Revenue beat(2)-1.58%
Max Revenue beat(2)-1.48%
Revenue beat(4)0
Avg Revenue beat(4)-1.41%
Min Revenue beat(4)-1.58%
Max Revenue beat(4)-1.14%
Revenue beat(8)0
Avg Revenue beat(8)-1.3%
Revenue beat(12)1
Avg Revenue beat(12)-1.04%
Revenue beat(16)2
Avg Revenue beat(16)-1.32%
PT rev (1m)0%
PT rev (3m)6.38%
EPS NQ rev (1m)0.13%
EPS NQ rev (3m)1.3%
EPS NY rev (1m)-0.03%
EPS NY rev (3m)0.39%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)0.92%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)0.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.24 | ||
| Fwd PE | 17.73 | ||
| P/S | 5.1 | ||
| P/FCF | 21.75 | ||
| P/OCF | 20.36 | ||
| P/B | 6.17 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.85 |
EPS(TTM)3.8
EY5.2%
EPS(NY)4.12
Fwd EY5.64%
FCF(TTM)3.36
FCFY4.6%
OCF(TTM)3.59
OCFY4.91%
SpS14.33
BVpS11.85
TBVpS-5.43
PEG (NY)2.27
PEG (5Y)5.5
Graham Number31.83
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.32% | ||
| ROE | 21.73% | ||
| ROCE | 14.35% | ||
| ROIC | 11.7% | ||
| ROICexc | 14.23% | ||
| ROICexgc | 168.77% | ||
| OM | 22.09% | ||
| PM (TTM) | 17.97% | ||
| GM | 64.94% | ||
| FCFM | 23.45% |
ROA(3y)9.67%
ROA(5y)10.49%
ROE(3y)24.29%
ROE(5y)25.65%
ROIC(3y)14.02%
ROIC(5y)15.13%
ROICexc(3y)19.45%
ROICexc(5y)21.44%
ROICexgc(3y)218.06%
ROICexgc(5y)205%
ROCE(3y)17.32%
ROCE(5y)18.35%
ROICexgc growth 3Y7.78%
ROICexgc growth 5Y-7.79%
ROICexc growth 3Y-15.92%
ROICexc growth 5Y-13.75%
OM growth 3Y-6.7%
OM growth 5Y-5.03%
PM growth 3Y-7.78%
PM growth 5Y-4.61%
GM growth 3Y1.26%
GM growth 5Y0.21%
F-Score8
Asset Turnover0.46
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.56 | ||
| Debt/FCF | 2.11 | ||
| Debt/EBITDA | 1.72 | ||
| Cap/Depr | 32.2% | ||
| Cap/Sales | 1.6% | ||
| Interest Coverage | 8.34 | ||
| Cash Conversion | 92.6% | ||
| Profit Quality | 130.53% | ||
| Current Ratio | 1 | ||
| Quick Ratio | 0.91 | ||
| Altman-Z | 3.09 |
F-Score8
WACC9.07%
ROIC/WACC1.29
Cap/Depr(3y)36.04%
Cap/Depr(5y)33.93%
Cap/Sales(3y)1.44%
Cap/Sales(5y)1.33%
Profit Quality(3y)126.8%
Profit Quality(5y)125.54%
High Growth Momentum
Growth
EPS 1Y (TTM)1.88%
EPS 3Y4.19%
EPS 5Y3.5%
EPS Q2Q%13.79%
EPS Next Y8.49%
EPS Next 2Y8.04%
EPS Next 3Y7.97%
EPS Next 5Y8.38%
Revenue 1Y (TTM)5.3%
Revenue growth 3Y3.19%
Revenue growth 5Y2.82%
Sales Q2Q%7.56%
Revenue Next Year5.35%
Revenue Next 2Y4.98%
Revenue Next 3Y4.85%
Revenue Next 5Y4.95%
EBIT growth 1Y-3.69%
EBIT growth 3Y-3.72%
EBIT growth 5Y-2.35%
EBIT Next Year15.46%
EBIT Next 3Y7.42%
EBIT Next 5YN/A
FCF growth 1Y30.15%
FCF growth 3Y1.39%
FCF growth 5Y-1.94%
OCF growth 1Y30.45%
OCF growth 3Y2.38%
OCF growth 5Y-1.65%
CISCO SYSTEMS INC / CSCO FAQ
What is the ChartMill fundamental rating of CISCO SYSTEMS INC (CSCO) stock?
ChartMill assigns a fundamental rating of 6 / 10 to CSCO.
Can you provide the valuation status for CISCO SYSTEMS INC?
ChartMill assigns a valuation rating of 4 / 10 to CISCO SYSTEMS INC (CSCO). This can be considered as Fairly Valued.
Can you provide the profitability details for CISCO SYSTEMS INC?
CISCO SYSTEMS INC (CSCO) has a profitability rating of 7 / 10.
What is the valuation of CISCO SYSTEMS INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for CISCO SYSTEMS INC (CSCO) is 19.24 and the Price/Book (PB) ratio is 6.17.
What is the earnings growth outlook for CISCO SYSTEMS INC?
The Earnings per Share (EPS) of CISCO SYSTEMS INC (CSCO) is expected to grow by 8.49% in the next year.