CISCO SYSTEMS, INC. (CSCO)

Price—Loading quote

AI: Overvalued

Price checkThe price assumes strong growth continues, leaving little room for a normal slowdown.

At $111.68, Cisco’s market value was $440.2 billion. Trailing reported earnings were about $3.34 a share, so the price was roughly 33 times earnings. The latest twelve months through April produced about $11.8 billion of free cash flow—cash left after running and investing in the business—or only a 2.7% yield on market value. Even management’s fiscal 2027 adjusted-earnings midpoint of $5.08 implies 22 times earnings. That combination requires sustained growth and supports an Overvalued verdict from a value perspective.

Big pictureCisco’s latest surge is powerful, but its longer record shows pronounced spending cycles.

Fiscal 2025 revenue of $56.7 billion remained slightly below 2023’s $57.0 billion, while net income fell to $10.2 billion from $12.6 billion, showing Cisco’s exposure to equipment-spending cycles. Momentum then accelerated: third-quarter 2026 revenue rose 12% and operating income 24%; fourth-quarter revenue rose 18% and profit reached $3.86 billion, up 51%. Latest-twelve-month free cash flow was about $11.8 billion. Still, nine-month 2026 free cash flow fell to $7.8 billion from $9.3 billion, partly because Cisco paid a $2.3 billion transition tax.

Business strengthHigh margins and signed contracts support cash, while debt and share awards reduce resilience.

Gross margin—the sales share left after delivery costs—was 63.6%, and signed obligations not yet recognized as revenue totaled $43.5 billion, up 4%. However, cash and equivalents were $7.1 billion against $31.3 billion of debt, while current assets of $36.6 billion trailed near-term liabilities of $39.5 billion; total cash and investments of $16.6 billion soften that concern. Fiscal 2025 dividends and buybacks consumed $12.4 billion of $13.3 billion free cash flow. Shares fell 1.2%, but $2.9 billion of employee share awards through April absorbed much of the buyback benefit.

What could change the storyArtificial intelligence demand can justify today’s premium, but weaker margins would quickly challenge it.

Cisco reported $4.0 billion of fourth-quarter artificial-intelligence infrastructure orders and $9.3 billion for fiscal 2026, about 4.5 times 2025. Management guided 2027 revenue to $72.2–$73.4 billion and adjusted earnings, which exclude selected costs, to $5.05–$5.11 a share. The bull case is successful order conversion plus campus-network replacement demand. The bear case is lower profit per hardware sale: third-quarter gross margin fell two percentage points, services revenue fell 1%, and security was flat. Cash flow above roughly $17.6 billion would create a 4% yield; staying near $12 billion would leave the premium exposed.

$111.68 price considered

AI: News

Record quarter, sharp selloffRecord artificial intelligence demand lifted results, but margin worries triggered a sharp selloff.

On August 12, Cisco reported fiscal fourth-quarter revenue of $17.25 billion, up 18%, and profit of $3.86 billion versus $2.55 billion a year earlier. Adjusted earnings of $1.22 a share beat the $1.17 estimate; 2027 guidance called for $72.2–$73.4 billion of revenue and $5.05–$5.11 of adjusted earnings. Despite the beats, shares fell 8.4% on August 13. Reporting linked investor concern to implied gross-margin pressure and slower growth later in 2027; this interpretation is more credible than attributing the move to timing alone.

Demand forecast resetA major demand upgrade and spending reset convinced investors that Cisco’s growth had accelerated.

On May 13, third-quarter revenue reached $15.8 billion, up 12%, while reported earnings rose 37% to $0.85 a share. Product orders jumped 35%, and Cisco raised expected fiscal 2026 hyperscaler artificial-intelligence orders from $5 billion to $9 billion. It also announced a restructuring of nearly 4,000 jobs with up to $1 billion of charges to redirect spending toward silicon, optics, security, and artificial intelligence. Shares gained 13.4% on May 14; the simultaneous results, outlook, and restructuring prevent precise attribution to any single item.

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Free cash flow

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Total cash / debt

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015	2014	2013	2012	2011	2010	2009	2008
Revenue	$56.65B	$53.80B	$57.00B	$51.56B	$49.82B	$49.30B	$51.90B	$49.33B	$48.01B	$49.25B	$49.16B	$47.14B	$48.61B	$46.06B	$43.22B	$40.04B	$36.12B	$39.54B
Gross profit	$36.79B	$34.83B	$35.75B	$32.25B	$31.89B	$31.68B	$32.67B	$30.61B	$30.22B	$30.96B	$29.68B	$27.77B	$29.44B	$28.21B	$26.54B	$25.64B	$23.09B	$25.35B
Research & development	$9.30B	$7.98B	$7.55B	$6.77B	$6.55B	$6.35B	$6.58B	$6.33B	$6.06B	$6.30B	$6.21B	$6.29B	$5.94B	$5.49B	$5.82B	—	—	—
Operating expenses	$25.03B	$22.65B	$20.72B	$18.28B	$19.06B	$18.06B	$18.45B	$18.30B	$18.25B	$18.30B	$18.91B	$18.42B	$18.24B	$18.14B	$18.86B	$16.48B	$15.77B	$15.90B
Operating income	$11.76B	$12.18B	$15.03B	$13.97B	$12.83B	$13.62B	$14.22B	$12.31B	$11.97B	$12.66B	$10.77B	$9.35B	$11.20B	$10.06B	$7.67B	$9.16B	$7.32B	$9.44B
EBITDAderived	$12.46B	$12.88B	$15.73B	$14.77B	$13.63B	$14.52B	$15.22B	$13.41B	$13.07B	$13.66B	$11.87B	$10.54B	$12.40B	$11.16B	—	—	—	—
Net income	$10.18B	$10.32B	$12.61B	$11.81B	$10.59B	$11.21B	$11.62B	$110.0M	$9.61B	$10.74B	$8.98B	$7.85B	$9.98B	$8.04B	$6.49B	$7.77B	$6.13B	$8.05B
Basic EPSper diluted share	$2.56	$2.55	$3.08	$2.83	$2.51	$2.65	$2.63	$0.02	$1.92	$2.13	$1.76	$1.50	$1.87	$1.50	$1.17	$1.36	$1.05	$1.35
Diluted EPSper diluted share	$2.55	$2.54	$3.07	$2.82	$2.50	$2.64	$2.61	$0.02	$1.90	$2.11	$1.75	$1.49	$1.86	$1.49	$1.17	$1.33	$1.05	$1.31

Review source filings at SEC.gov ↗

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys0$0.00 disclosed value

Sells (SEC code S)136$141.46M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Jun 16, 2026Form 4 · 10b5-1	Subaiya Thimaya K.EVP, Operations	SellCommon Stock	1.9K	$120.51	$229.9K	140.9K
Jun 16, 2026Form 4 · 10b5-1	Subaiya Thimaya K.EVP, Operations	SellCommon Stock	5.2K	$119.69	$624.7K	142.8K
Jun 11, 2026Form 4 · 10b5-1	Tuszik OliverEVP, Global Sales	SellCommon Stock	100	$122.44	$12.2K	172.7K
Jun 11, 2026Form 4 · 10b5-1	Tuszik OliverEVP, Global Sales	SellCommon Stock	1.4K	$121.77	$171.3K	172.8K
Jun 11, 2026Form 4 · 10b5-1	Tuszik OliverEVP, Global Sales	SellCommon Stock	700	$120.51	$84.4K	174.2K

Review ownership filings at SEC.gov ↗

CISCO SYSTEMS, INC. (CSCO)

Financial charts

Financial statements

Insider buys & sells