CISCO SYSTEMS INC (CSCO)
US17275R1023 - Common Stock
We assign a fundamental rating of 7 out of 10 to CSCO. CSCO was compared to 54 industry peers in the Communications Equipment industry. CSCO gets an excellent profitability rating and is at the same time showing great financial health properties. CSCO has a correct valuation and a medium 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 an excellent Return On Assets value of 13.29%, CSCO belongs to the best of the industry, outperforming 94.44% of the companies in the same industry.
The Return On Equity of CSCO (29.06%) is better than 96.30% of its industry peers.
The Return On Invested Capital of CSCO (17.68%) 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 10.42%.
The last Return On Invested Capital (17.68%) for CSCO is above the 3 year average (16.86%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.29% | ||
| ROE | 29.06% | ||
| ROIC | 17.68% |
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 Profit Margin of 23.49%. This is amongst the best in the industry. CSCO outperforms 98.15% of its industry peers.
CSCO's Profit Margin has improved in the last couple of years.
CSCO has a Operating Margin of 27.99%. This is amongst the best in the industry. CSCO outperforms 96.30% of its industry peers.
CSCO's Operating Margin has been stable in the last couple of years.
CSCO's Gross Margin of 64.22% is amongst the best of the industry. CSCO outperforms 88.89% of its industry peers.
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 | 27.99% | ||
| PM (TTM) | 23.49% | ||
| GM | 64.22% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so CSCO is creating value.
Compared to 1 year ago, CSCO has less shares outstanding
Compared to 5 years ago, CSCO has less shares outstanding
CSCO has a better debt/assets ratio than last year.
2.2 Solvency
CSCO has an Altman-Z score of 3.38. This indicates that CSCO is financially healthy and has little risk of bankruptcy at the moment.
CSCO's Altman-Z score of 3.38 is fine compared to the rest of the industry. CSCO outperforms 77.78% of its industry peers.
The Debt to FCF ratio of CSCO is 0.86, which is an excellent value as it means it would take CSCO, only 0.86 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.86, CSCO is in the better half of the industry, outperforming 79.63% of the companies in the same industry.
A Debt/Equity ratio of 0.23 indicates that CSCO is not too dependend on debt financing.
CSCO's Debt to Equity ratio of 0.23 is in line compared to the rest of the industry. CSCO outperforms 46.30% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 0.86 | ||
| Altman-Z | 3.38 |
ROIC/WACC1.85
WACC9.58%
2.3 Liquidity
A Current Ratio of 1.37 indicates that CSCO should not have too much problems paying its short term obligations.
The Current ratio of CSCO (1.37) is worse than 70.37% of its industry peers.
A Quick Ratio of 1.26 indicates that CSCO should not have too much problems paying its short term obligations.
CSCO has a Quick ratio of 1.26. This is comparable to the rest of the industry: CSCO outperforms 40.74% of its industry peers.
The current and quick ratio evaluation for CSCO is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.37 | ||
| Quick Ratio | 1.26 |
3. Growth
3.1 Past
CSCO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 19.77%, 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.
Looking at the last year, CSCO shows a small growth in Revenue. The Revenue has grown by 7.66% in the last year.
CSCO shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.93% yearly.
EPS 1Y (TTM)19.77%
EPS 3Y6.63%
EPS 5Y8.34%
EPS growth Q2Q-1.14%
Revenue 1Y (TTM)7.66%
Revenue growth 3Y4.95%
Revenue growth 5Y2.93%
Revenue growth Q2Q-5.89%
3.2 Future
Based on estimates for the next years, CSCO will show a small growth in Earnings Per Share. The EPS will grow by 3.87% on average per year.
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-0.01%
EPS Next 3Y1.89%
EPS Next 5Y3.87%
Revenue Next Year-7.51%
Revenue Next 2Y-2.88%
Revenue Next 3Y-0.9%
Revenue Next 5Y2.01%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less 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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
CSCO is valuated reasonably with a Price/Earnings ratio of 11.62.
Based on the Price/Earnings ratio, CSCO is valued cheaply inside the industry as 83.33% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 24.84. CSCO is valued rather cheaply when compared to this.
CSCO is valuated correctly with a Price/Forward Earnings ratio of 12.34.
CSCO's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. CSCO is cheaper than 74.07% of the companies in the same industry.
CSCO is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.35, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.62 | ||
| Fwd PE | 12.34 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CSCO indicates a somewhat cheap valuation: CSCO is cheaper than 77.78% of the companies listed in the same industry.
CSCO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. CSCO is cheaper than 77.78% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.29 | ||
| EV/EBITDA | 9.25 |
4.3 Compensation for Growth
The excellent profitability rating of CSCO may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.39
EPS Next 2Y-0.01%
EPS Next 3Y1.89%
5. Dividend
5.1 Amount
CSCO has a Yearly Dividend Yield of 3.33%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 17.33, CSCO pays a better dividend. On top of this CSCO pays more dividend than 87.04% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.41, CSCO pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.33% |
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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)4.39%
Div Incr Years12
Div Non Decr Years12
5.3 Sustainability
47.20% 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.
DP47.2%
EPS Next 2Y-0.01%
EPS Next 3Y1.89%
CISCO SYSTEMS INC
NASDAQ:CSCO (4/26/2024, 7:00:00 PM)
Premarket: 47.89 +0.03 (+0.06%)47.86
-0.24 (-0.5%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
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Market Cap193.79B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.33% |
Dividend Growth(5Y)
DP
Div Incr Years
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Surprises & Revisions
EPS beat(2)
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Revenue NQ rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.62 | ||
| Fwd PE | 12.34 | ||
| 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)1.39
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.29% | ||
| ROE | 29.06% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 27.99% | ||
| PM (TTM) | 23.49% | ||
| GM | 64.22% | ||
| 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 Turnover0.57
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.37 | ||
| Quick Ratio | 1.26 | ||
| 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)
Growth
EPS 1Y (TTM)19.77%
EPS 3Y6.63%
EPS 5Y
EPS growth Q2Q
EPS Next Y-2.6%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)7.66%
Revenue growth 3Y4.95%
Revenue growth 5Y
Revenue growth 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
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EBIT Next 5Y
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