CSCO Fair Value Estimate
$51.3337.6% overvalued
Blended fair value estimate based on DCF, Graham Number, and earnings-based models.
Cisco Systems Inc
Exchange: NASDAQSector: TechnologyIndustry: Communication Equipment
Cisco is the worldwide technology leader that is revolutionizing the way organizations connect and protect in the AI era. For more than 40 years, Cisco has securely connected the world. With its industry leading AI-powered solutions and services, Cisco enables its customers, partners and communities to unlock innovation, enhance productivity and strengthen digital resilience. With purpose at its core, Cisco remains committed to creating a more connected and inclusive future for all. Discover more on The Newsroom and follow us on X at @Cisco. Cisco and the Cisco logo are trademarks or registered trademarks of Cisco and/or its affiliates in the U.S. and other countries. A listing of Cisco's trademarks can be found at http://www.cisco.com/go/trademarks. Third-party trademarks mentioned are the property of their respective owners. The use of the word 'partner' does not imply a partnership relationship between Cisco and any other company. Disclaimer: Many of the products and features mentioned are still in development and will be made available as they are finalized, subject to ongoing evolution in development and innovation. The timeline for their release is subject to change. Logo - https://mma.prnewswire.com/media/2808325/Cisco_Logo.jpg
Did you know?
CSCO's revenue grew at a 1.5% CAGR over the last 6 years.
Current Price
$82.22
-1.14%GoodMoat Value
$51.33
37.6% overvaluedProfile
Valuation (TTM)
Market Cap$324.86B
P/E29.33
EV$322.79B
P/B6.94
Shares Out3.95B
P/Sales5.50
Revenue$59.05B
EV/EBITDA19.78
Cisco Systems Inc (CSCO) Valuation
GoodMoat Analysis
Cisco Systems appears unfavourable from a value investing perspective, trading at a significant premium to its estimated intrinsic value. The current price of $81.83 is 59% above the GoodMoat Target of $51.33, indicating a negative margin of safety.
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Based on the GoodMoat Investment Framework, Cisco's valuation is a primary concern. The GoodMoat Target of $51.33 suggests a fair value estimate, and the current price of $81.83 represents a -59% margin of safety, which falls deep into the 'Unfavourable' band per Section 4's DCF analysis guidelines. This negative margin of safety indicates the stock is priced well above its estimated intrinsic value. The forward P/E of 29.2x is elevated, especially when considered against the company's 9.7% YoY revenue growth, resulting in a PEG ratio well above 1.0. While the 4.1% FCF yield and 1.99% dividend yield offer some income, the core valuation metrics do not align with value investing principles that seek a margin of safety. The P/E is also high relative to the company's growth profile, making it difficult to justify based on current fundamentals. For a value investor, the price would need to decline substantially to reach a level that provides an adequate buffer against potential downside or miscalculation. Analysis based on data as of 2024-05-15.
CSCO Valuation Metrics
FCF$13.29B
FCF Growth Rate-1.94%
EPS Growth (CAGR)-1.94%
WACC10.00%
Fair Value Models
Graham Number, PEG-based, and Earnings-based models
View Fair Value →CSCO Valuation & Fair Value Analysis
Cisco Systems Inc (CSCO) valuation analysis using multiple fair value methodologies. GoodMoat calculates a blended fair value target using discounted cash flow (DCF) analysis, the Graham Number, and earnings-based valuation models.
The GoodMoat Fair Value target for Cisco Systems Inc is $51.33. The current stock price is $82.22, suggesting the stock is 60.2% overvalued.
The price-to-earnings (P/E) ratio is 29.33. Price-to-book ratio is 6.94. Price-to-sales ratio is 5.50. Enterprise value to EBITDA is 19.78. PEG ratio is 0.94.
GoodMoat's valuation models include the Graham Number (based on EPS and book value), an earnings-based model (discounted future EPS), and a PEG-adjusted valuation. The three models are averaged to produce a blended fair value estimate. Use these tools alongside the DCF calculator and reverse DCF to form a comprehensive view of Cisco Systems Inc's intrinsic value.