How Smart Investors Look at Cisco Systems (CSCO).

Cisco Systems logged a 0.47% change during today's afternoon session, and is now trading at a price of $48.71 per share. The S&P 500 index moved 0.54% and the Nasdaq posted a 0.96% change.

Cisco Systems shares moved -10.6% over the last 52 weeks, with a high of $55.15 and a low of $38.3. During this time, the stock lagged the S&P 500 index by -1.37%. As of January 2022, the company's 50-day average price is $48.15. Cisco Systems, Inc. is an American multinational technology conglomerate headquartered in San Jose, California, in the center of Silicon Valley. The large-cap Technology company is based in San Jose, CA. Cisco Systems has returned a 3.22% dividend yield over the last 12 months.

The Company Has a Steady Stream of Strong Cash Flows:

2019-07-27 2020-07-25 2021-07-31 2022-07-30
Revenue (MM) $51,037 $48,991 $49,690 $51,376
Revenue Growth n/a -4.01% 1.43% 3.39%
Gross Margins 64.0% 64.67% 64.19% 62.77%
Gross Margins Growth n/a 1.05% -0.74% -2.21%
Operating Margins 27.86% 27.8% 25.83% 27.19%
Operating Margins Growth n/a -0.22% -7.09% 5.27%
Earnings Per Share $2.73 $2.65 $2.51 $2.87
EPS Growth n/a -2.93% -5.28% 14.34%
Free Cash Flow (MM) $14,922 $14,656 $14,762 $12,749
FCF Growth n/a -1.78% 0.72% -13.64%
Capital Expenditures (MM) $909 $770 $692 $477
Net Debt / EBITDA 0.83 0.39 0.35 0.16

Cisco Systems Is Undervalued at Today's Prices:

Compared to the Technology sector's average of 27.16, Cisco Systems has a trailing twelve month P/E ratio of 17.84.

However, Cisco Systems is likely undervalued in terms of its equity because its P/B ratio is 5.03 compared to its sector average of 6.23. The company's shares are currently trading 119.51% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * 5-year average EPS * book value per share) = √(22.5 * 2.16 * 10.13) = $22.19

Cisco Systems Is the Subject of Positive Market Indicators:

20 analysts are following Cisco Systems and have set target prices ranging from $46.0 to $69.0 per share. On average, they have given the company a rating of buy. At the current price of $48.71, CSCO is trading -14.42% away from its average analyst target price of $56.92 per share, implying an analyst consensus of some upside potential for the stock.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.