Cisco Systems, Inc. Common Stock (DE)
CSCO
$79.02
+1.40%
Cisco Systems is the world's largest provider of networking equipment and a major software company. It is a dominant player in networking hardware and software, with core advantages in cybersecurity and a global sales and marketing footprint.
CSCO
Cisco Systems, Inc. Common Stock (DE)
$79.02
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Investment Opinion: Should I buy CSCO Today?
Based on a synthesis of the data, the objective assessment for CSCO is a Hold. The company's strong fundamentals, defensive profile, and positive analyst sentiment provide a solid foundation. However, the current valuation, particularly the high trailing P/E and extreme PEG ratio, suggests the stock is fairly valued to slightly rich at present levels. Investors may find better entry points during market pullbacks, given the stock's history of trading 12% below its 52-week high.
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CSCO 12-Month Price Forecast
The analysis yields a neutral stance with medium confidence. Cisco's excellent profitability and cash generation are compelling, but they appear largely reflected in the current price. The stock's near-term path will likely be determined by the interplay between execution on AI growth and management of input cost inflation.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Cisco Systems, Inc. Common Stock (DE)'s 12-month outlook, with a consensus price target around $102.73 and implied upside of +30.0% versus the current price.
Average Target
$102.73
15 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
15
covering this stock
Price Range
$63 - $103
Analyst target range
Wall Street analyst coverage for Cisco is active, with 15 analysts providing estimates. The consensus estimated EPS for the period is $4.88, with a range from $4.69 to $5.03. Estimated revenue consensus is approximately $68.19 billion. Recent institutional ratings from firms like UBS, Rosenblatt, Evercore ISI, Morgan Stanley, and JP Morgan are predominantly positive, with actions such as 'Buy', 'Overweight', and 'Outperform'.
Bulls vs Bears: CSCO Investment Factors
Cisco presents a mixed but leaning positive picture. Strong fundamentals, cash generation, and defensive characteristics are offset by valuation concerns and near-term margin pressures. The stock's performance hinges on its ability to navigate cost inflation while capitalizing on AI infrastructure demand.
Bullish
- Strong Revenue Growth: Q2 revenue grew 9.7% YoY, showing solid business momentum.
- Robust Profitability & Cash Flow: Net margin of 20.7% and $12.85B TTM FCF support shareholder returns.
- Defensive Market Outperformance: Beta of 0.83 and strong relative strength vs. S&P 500 in downturns.
- Positive Analyst Sentiment: Consensus EPS estimate of $4.88 with predominant Buy/Overweight ratings.
Bearish
- Margin Compression Risk: News cites rising memory costs pressuring hardware profit margins.
- High PEG Ratio: PEG of 68.4 indicates extremely high price for expected growth.
- Elevated Trailing P/E: Trailing P/E of 26.8 is high for a mature tech company.
- Geopolitical & Macro Risks: News highlights market volatility from geopolitical tensions.
CSCO Technical Analysis
The stock has shown a strong overall uptrend over the past six months, gaining 13.59% from the price of $68.31 on October 2, 2025, to $77.59 on March 31, 2026. It has significantly outperformed the broader market, with a 6-month relative strength of 16.41 against the S&P 500. In the short term, the stock has been volatile, declining 2.35% over the past month but gaining 0.73% over the past three months. This contrasts with the S&P 500's declines of 5.25% and 4.63% over the same periods, highlighting Cisco's defensive characteristics with a beta of 0.83. The current price of $77.59 is positioned in the upper half of its 52-week range of $52.11 to $88.19, approximately 12% below its yearly high. The price data shows a sharp rally from late January to mid-February 2026, followed by a consolidation phase with support around the $76-$78 level.
Beta
0.83
0.83x market volatility
Max Drawdown
-17.0%
Largest decline past year
52-Week Range
$52-$88
Price range past year
Annual Return
+27.8%
Cumulative gain past year
| Period | CSCO Return | S&P 500 |
|---|---|---|
| 1m | +0.1% | -3.6% |
| 3m | +3.9% | -4.0% |
| 6m | +16.3% | -2.0% |
| 1y | +27.8% | +16.2% |
| ytd | +3.9% | -3.8% |
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CSCO Fundamental Analysis
Revenue growth has been solid, with the latest quarterly revenue of $15.35 billion representing a 9.71% year-over-year increase. Profitability remains healthy, with a net margin of 20.69% in Q2 2026, supported by a gross margin of 64.97%. Sequentially, revenue grew from $14.88 billion in Q1, and net income improved from $2.86 billion to $3.18 billion. The company maintains a moderate debt-to-equity ratio of 0.60, indicating a balanced capital structure. Financial health is further supported by strong cash generation, with free cash flow over the trailing twelve months reported at $12.85 billion. The current ratio is near 1.0, suggesting adequate liquidity to cover short-term obligations. Operational efficiency is robust, with a return on equity (ROE) of 21.73% and a return on assets (ROA) of 6.99%. The company continues to generate substantial operating cash flow, which supports shareholder returns through dividends and share repurchases.
Quarterly Revenue
$15.3B
2026-01
Revenue YoY Growth
+0.09%
YoY Comparison
Gross Margin
+0.64%
Latest Quarter
Free Cash Flow
$12.8B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is CSCO Overvalued?
Given the company's positive net income, the primary valuation metric is the P/E ratio. Cisco's trailing P/E ratio is 26.83, while its forward P/E is 17.19, suggesting the market expects earnings growth. The forward P/E is more relevant for assessing future valuation based on analyst estimates. The price-to-sales (P/S) ratio is 4.82, and the enterprise value-to-sales (EV/Sales) is 5.46. Peer comparison data is not available in the provided inputs, so a relative valuation against industry averages cannot be performed. The valuation appears to be supported by the company's stable profitability, strong cash flows, and a dividend yield of 2.36%.
PE
26.8x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 13x~27x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
19.0x
Enterprise Value Multiple
Investment Risk Disclosure
Cisco faces several key risks. Financially, the high PEG ratio of 68.4 signals the market is pricing in significant growth that may not materialize, creating valuation risk. The trailing P/E of 26.8 is also elevated for a mature company. Operationally, recent news specifically highlights margin compression from rising memory costs, which could pressure the healthy 64.9% gross margin if sustained. The company's moderate debt-to-equity of 0.60 and current ratio near 1.0 indicate adequate but not exceptional financial flexibility.
Market and competitive risks are substantial. Geopolitical tensions, as noted in news driving a 'flight to safety,' can increase volatility and potentially disrupt global supply chains. As a dominant player, Cisco faces continuous competitive threats in its core networking and cybersecurity segments, which could impact pricing power and market share. Furthermore, a broad tech sector selloff, as referenced in news about a '$500 Billion' wipeout, demonstrates Cisco's vulnerability to sector-wide sentiment shifts despite its lower beta.
FAQ
Key risks include margin compression from rising input costs (noted in recent news), a high valuation (PEG of 68.4), and exposure to geopolitical and macroeconomic volatility affecting IT spending. Competitive pressures in networking and cybersecurity also pose a constant threat to its market leadership and pricing power.
The 12-month forecast is for range-bound trading with a base case target of $75-$85. The bull case ($88-$95) depends on AI success and margin improvement, while the bear case ($65-$72) involves worsening cost pressures or a market downturn. Analyst consensus EPS is $4.88, providing a fundamental anchor. The stock's defensive beta of 0.83 may provide downside protection relative to the market.
CSCO appears fairly valued to slightly overvalued based on traditional metrics. The trailing P/E of 26.8 is high for its growth profile. The forward P/E of 17.2, based on analyst EPS estimates of $4.88, is more reasonable and suggests the market expects earnings growth. The extreme PEG ratio of 68.4 is a significant overvaluation warning signal based on growth expectations.
CSCO is a Hold, not a strong Buy, at its current price. The company is fundamentally sound with 9.7% revenue growth, a 20.7% net margin, and a 2.36% dividend yield. However, its high trailing P/E of 26.8 and extreme PEG ratio of 68.4 suggest the stock is fairly to fully valued. It may be a good buy on a pullback closer to $75.
CSCO is primarily suitable for long-term investors seeking stable growth, income (2.36% yield), and lower volatility (beta 0.83). Its mature business model and shareholder returns align with a multi-year horizon. Short-term trading is challenged by its moderate growth rate and sensitivity to quarterly margin reports and tech sector sentiment.