Communication Equipment · NASDAQ
Current Price
$89.57
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Cisco Systems, Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol based networking and other products related to the communications and information technology industry in the Americas, Europe, the Middle East, Africa, the Asia Pacific, Japan, and China. The company also offers switching portfolio encompasses campus switching as well as data center switching; enterprise routing portfolio interconnects public and private wireline and mobile networks, delivering highly secure, and reliable connectivity to campus, data center and branch networks; and wireless products include indoor and outdoor wireless coverage designed for seamless roaming use of voice, video, and data applications. In addition, it provides security, which comprising network security, identity and access management, secure access service edge, and threat intelligence, detection, and response offerings; collaboration products, such as Webex Suite, collaboration devices, contact center, and communication platform as a service; end-to-end collaboration solutions that can be delivered from the cloud, on-premise or within hybrid cloud environments allowing customers to transition their collaboration solutions from on-premise to the cloud; and observability offers network assurance, monitoring and analytics and observability suite. Further, the company offers a range of service and support options for its customers, including technical support and advanced services and advisory services. It serves businesses of various sizes, public institutions, governments, and service providers. The company sells its products and services directly, as well as through systems integrators, service providers, other resellers, and distributors. Cisco Systems, Inc. has strategic alliances with other companies. Cisco Systems, Inc. was incorporated in 1984 and is headquartered in San Jose, California.
ROIC (TTM)
12.0%
ROE (TTM)
23.6%
FCF Yield
3.63%
Based on trailing twelve-month data, CSCO shows a free cash flow per share of N/A and a ROIC of 12.0%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 3.63% are important context metrics when evaluating CSCO's stock valuation relative to peers.
The intrinsic value of CSCO depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether CSCO is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $89.57. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Cisco Systems, Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Communication Equipment industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting CSCO's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Cisco Systems, Inc., this means projecting how much free cash flow the Communication Equipment will produce over the next 5-10 years, then discounting those amounts to today's dollars. CSCO's ROIC of 12.0% shows moderate capital returns.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For CSCO, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
