Cisco Systems, Inc. (CSCO) Fair Value & PE Analysis
Communication Equipment · NASDAQ
Current Price
$121.10
PE Ratio (TTM)
40.0x
Intrinsic Value
$134.65
+10.1% margin of safety
What Is Cisco Systems, Inc.'s Fair Value?
As of 2026-06-12, applying a 40.0x earnings multiple to Cisco Systems, Inc.'s (CSCO) earnings per share of $3.02 yields a fair value estimate of $134.65 per share, versus a market price of $121.1.
Fair value from earnings multiples is sensitive to the multiple you choose. Across the sensitivity grid the estimate spans $115.16 to $156.61. This is a relative estimate anchored to earnings, not a statement of fact. For a cash flow based view, see the intrinsic value estimate on the DCF page.
How our PE model works · Recalculate in PE mode · CSCO intrinsic value (DCF view)
Is Cisco Systems, Inc. (CSCO) Overvalued?
At $121.1, CSCO trades about 10.1% below its PE-based fair value estimate, a modest discount to its earnings power, though not enough for us to call it cheap outright.
COMPETITIVE MOAT
↑Extensive Partner Ecosystem
Cisco's vast network of certified partners, like NWN, extends its reach and integration capabilities. This deep channel presence creates significant switching costs for customers.
↑Network Infrastructure Dominance
Cisco remains a foundational player in enterprise networking hardware and software. Its established market share and brand recognition are difficult for competitors to displace.
↑Security Integration Expertise
Cisco's integrated security solutions are crucial for businesses, especially with rising AI-driven data breaches. This comprehensive approach offers a sticky value proposition.
INVESTMENT RISKS
↓AI Talent Competition
The intense competition for AI talent, leading to layoffs in other tech sectors, could impact Cisco's ability to innovate and execute its AI strategies. This may slow down product development.
↓Market Volatility and Valuation
The semiconductor rally, despite bubble fears, suggests potential market irrationality. Cisco's valuation could be susceptible to broader market corrections or investor sentiment shifts.
↓Disruptive Innovation Threats
While Cisco has a strong base, emerging technologies and agile competitors could challenge its established market position. The rapid pace of tech evolution poses a constant threat.
Base case
CSCO base case PE valuation
Intrinsic Value
$134.65
Margin of safety
+10.1%
Expected annual return
+2.1%
Base case assumptions: 9.8% annual earnings growth, 40x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the CSCO PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Cisco Systems, Inc. respond.
Open PE Calculator for CSCOCompany Overview
Cisco Systems, Inc. is a leading global technology company focused on designing, producing, and marketing Internet Protocol (IP)-based networking equipment, software, and associated products within the communications and information technology industries. The company operates extensively across major regions including the Americas, Europe, the Middle East, Africa, and the Asia Pacific, specifically covering Japan and China. Its comprehensive product lineup features switching solutions for both enterprise campuses and data centers. Cisco's enterprise routing segment is crucial for securely and reliably interconnecting public, private, wired, and mobile networks, ensuring vital connectivity across corporate campuses, data centers, and branch offices. Additionally, the company provides a range of wireless products offering seamless indoor and outdoor roaming for voice, video, and data applications. Security forms a significant pillar of its offerings, encompassing network defense, identity and access management, secure access service edge (SASE), alongside threat intelligence, detection, and response capabilities. For collaboration, Cisco delivers the Webex Suite, dedicated devices, contact center platforms, and communication platform-as-a-service (CPaaS). These end-to-end collaboration solutions are adaptable, available in cloud, on-premise, or hybrid environments, facilitating clients' migration to cloud-based systems. Moreover, their observability suite provides network assurance, monitoring, and analytics. Beyond its product portfolio, Cisco offers extensive customer support and services, including technical assistance, advanced professional services, and advisory consulting. The company serves a broad clientele, from small and large businesses to public institutions, governmental agencies, and service providers. Products and services are distributed directly by Cisco, as well as through a diverse network of system integrators, service providers, other resellers, and distributors. Cisco Systems, Inc. also engages in strategic collaborations with other industry players. Founded in 1984, the company is headquartered in San Jose, California.
Financial Metrics — CSCO PE Stock Valuation Data
PE Ratio (TTM)
40.0x
PEG Ratio
1.76
Earnings Yield
2.50%
ROE (TTM)
25.1%
Revenue/Share (TTM)
$15.36
Dividend Yield
1.36%
Debt/Equity
0.64x
Frequently Asked Questions
What is the PE ratio of CSCO?
The trailing twelve-month PE ratio of CSCO reflects how much investors pay per dollar of Cisco Systems, Inc.'s earnings. This metric is most useful when compared to Communication Equipment peers and the company's own historical range.
Is CSCO overvalued based on PE ratio?
CSCO's PE of 40.0x combined with a PEG ratio of 1.76 provides a growth-adjusted perspective. A PEG near 1.0 suggests the PE ratio is reasonably justified by the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Communication Equipment, a DCF analysis may be more appropriate.
How do I value CSCO stock using PE ratio?
To value Cisco Systems, Inc. using PE: (1) Compare the current PE (40.0x) against the Communication Equipment median to assess relative pricing, (2) check the PEG ratio (1.76) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of CSCO?
CSCO's PEG ratio is 1.76, calculated by dividing the PE ratio (40.0x) by the expected earnings growth rate. A PEG near 1.0 suggests the stock is fairly priced relative to growth. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for CSCO stock valuation?
PE ratio gives a quick relative read — how CSCO is priced versus Communication Equipment peers. DCF provides an absolute value based on projected free cash flows. For CSCO, with a strong ROE of 25.1%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See CSCO DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Technology valuationsP/E and DCF value CSCO with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.