74.59 USD
+0.26 (+0.35%)
74.2374 USD
-0.35 (-0.47%)
We assign a fundamental rating of 5 out of 10 to CSCO. CSCO was compared to 48 industry peers in the Communications Equipment industry. CSCO has an excellent profitability rating, but there are some minor concerns on its financial health. CSCO has a decent growth rate and is not valued too expensively. CSCO also has an excellent dividend rating.
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.
- Each year in the past 5 years CSCO had a positive operating cash flow.
1.2 Ratios
- Looking at the Return On Assets, with a value of 8.53%, CSCO belongs to the top of the industry, outperforming 81.63% of the companies in the same industry.
- CSCO has a Return On Equity of 22.04%. This is amongst the best in the industry. CSCO outperforms 87.76% of its industry peers.
- CSCO has a better Return On Invested Capital (12.86%) than 85.71% 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 12.15%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.53% | ||
| ROE | 22.04% | ||
| ROIC | 12.86% |
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 (17.90%) than 91.84% of its industry peers.
- CSCO's Profit Margin has declined in the last couple of years.
- The Operating Margin of CSCO (22.52%) is better than 91.84% of its industry peers.
- In the last couple of years the Operating Margin of CSCO has declined.
- CSCO has a better Gross Margin (64.85%) than 87.76% 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 | 22.52% | ||
| PM (TTM) | 17.9% | ||
| GM | 64.85% |
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
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), CSCO is creating some value.
- The number of shares outstanding for CSCO has been reduced compared to 1 year ago.
- CSCO has less shares outstanding than it did 5 years ago.
- The debt/assets ratio for CSCO has been reduced compared to a year ago.
2.2 Solvency
- CSCO has a debt to FCF ratio of 2.21. This is a good value and a sign of high solvency as CSCO would need 2.21 years to pay back of all of its debts.
- CSCO's Debt to FCF ratio of 2.21 is fine compared to the rest of the industry. CSCO outperforms 63.27% of its industry peers.
- A Debt/Equity ratio of 0.46 indicates that CSCO is not too dependend on debt financing.
- CSCO has a Debt to Equity ratio of 0.46. This is in the lower half of the industry: CSCO underperforms 69.39% 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 | 0.46 | ||
| Debt/FCF | 2.21 | ||
| Altman-Z | N/A |
ROIC/WACC1.36
WACC9.49%
2.3 Liquidity
- CSCO has a Current Ratio of 0.93. This is a bad value and indicates that CSCO is not financially healthy enough and could expect problems in meeting its short term obligations.
- Looking at the Current ratio, with a value of 0.93, CSCO is doing worse than 89.80% of the companies in the same industry.
- A Quick Ratio of 0.83 indicates that CSCO may have some problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 0.83, CSCO is doing worse than 87.76% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.93 | ||
| Quick Ratio | 0.83 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 10.20% over the past year.
- Measured over the past 5 years, CSCO shows a small growth in Earnings Per Share. The EPS has been growing by 3.50% on average per year.
- CSCO shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.91%.
- 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)10.2%
EPS 3Y4.19%
EPS 5Y3.5%
EPS Q2Q%9.89%
Revenue 1Y (TTM)8.91%
Revenue growth 3Y3.19%
Revenue growth 5Y2.82%
Sales Q2Q%7.53%
3.2 Future
- The Earnings Per Share is expected to grow by 10.07% on average over the next years. This is quite good.
- CSCO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.28% yearly.
EPS Next Y10.59%
EPS Next 2Y9.4%
EPS Next 3Y8.63%
EPS Next 5Y10.07%
Revenue Next Year7.24%
Revenue Next 2Y6.15%
Revenue Next 3Y5.74%
Revenue Next 5Y6.28%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 19.17, which indicates a rather expensive current valuation of CSCO.
- CSCO's Price/Earnings ratio is a bit cheaper when compared to the industry. CSCO is cheaper than 71.43% of the companies in the same industry.
- CSCO is valuated rather cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- Based on the Price/Forward Earnings ratio of 16.40, the valuation of CSCO can be described as correct.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of CSCO indicates a somewhat cheap valuation: CSCO is cheaper than 77.55% of the companies listed in the same industry.
- CSCO's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.17 | ||
| Fwd PE | 16.4 |
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 61.22% of the companies listed in the same industry.
- Based on the Price/Free Cash Flow ratio, CSCO is valued a bit cheaper than 65.31% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.15 | ||
| EV/EBITDA | 19.19 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- CSCO has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.81
PEG (5Y)5.48
EPS Next 2Y9.4%
EPS Next 3Y8.63%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.21%, CSCO has a reasonable but not impressive dividend return.
- CSCO's Dividend Yield is rather good when compared to the industry average which is at 0.78. CSCO pays more dividend than 85.71% of the companies in the same industry.
- CSCO's Dividend Yield is a higher than the S&P500 average which is at 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.21% |
5.2 History
- The dividend of CSCO has a limited annual growth rate of 2.65%.
- 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)2.65%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
- 62.56% of the earnings are spent on dividend by CSCO. This is not a sustainable payout ratio.
- CSCO's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP62.56%
EPS Next 2Y9.4%
EPS Next 3Y8.63%
CISCO SYSTEMS INC / CSCO FAQ
What is the ChartMill fundamental rating of CISCO SYSTEMS INC (CSCO) stock?
ChartMill assigns a fundamental rating of 5 / 10 to CSCO.
What is the valuation status of CISCO SYSTEMS INC (CSCO) stock?
ChartMill assigns a valuation rating of 5 / 10 to CISCO SYSTEMS INC (CSCO). This can be considered as Fairly Valued.
How profitable is CISCO SYSTEMS INC (CSCO) stock?
CISCO SYSTEMS INC (CSCO) has a profitability rating of 7 / 10.
What are the PE and PB ratios of CISCO SYSTEMS INC (CSCO) stock?
The Price/Earnings (PE) ratio for CISCO SYSTEMS INC (CSCO) is 19.17 and the Price/Book (PB) ratio is 6.29.
Can you provide the financial health for CSCO stock?
The financial health rating of CISCO SYSTEMS INC (CSCO) is 4 / 10.