CSCO
Cisco Systems, Inc.$79.42
Sell
Target $60.16
Report: Mar 07, 2026Technology • Communication Equipment • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$79.42-24.3%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$60.16
(24% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$88.19
52 Week Low$52.11
Avg. 3 Month Volume23.85M
Efficiency
LTM Gross Margin64.8%
LTM EBITDA Margin28.8%
LTM EBIT Margin24.5%
LTM Operating Margin22.7%
LTM ROA9.1%
LTM ROE23.6%
LTM ROIC37.2%
LTM ROCE17.0%
Capital Structure
Market Cap (MM)$306.5B
Enterprise Value (MM)$329.1B
Shares Outstanding3.96B
Total Debt (MM)$30.09B
Cash & Equivalents (MM)$7.46B
LTM Net Debt (MM)$22.63B
LTM Net Debt/EBITDA1.3x
Growth
TTM Rev. Growth9.0%
Last 3-Yr Rev. CAGR3.6%
Last 3-Yr EBITDA CAGR1.5%
Last 3-Yr EPS CAGR0.6%
Valuation
Street Target Price$96.50
LTM EV/Revenue5.6x
LTM EV/Gross Profit8.6x
LTM EV/EBIT22.7x
LTM EV/EBITDA19.4x
LTM P/E27.7x
LTM EV/FCF26.9x
LTM P/FCF25.0x
LTM P/TB5.5x
LTM P/B6.4x
Dividend Yield2.1%
Payout Ratio58.8%
Executive SummarySituation: Current price is $79.42 versus fair value $60.16 (-24.3% expected return), and valuation confidence is stable. Debate: Bull case depends on Normalization of AI Infrastructure Orders As hyperscalers complete their initial build-out, the 'lumpy' nature of demand will become apparent, likely leading to a sequential decline in orders that will challenge the current high-growth n... Bear case centers on Competitive Disruption in Data Centers Arista Networks and Nvidia are gaining share in high-performance AI networking, which could permanently impair Cisco's pricing power and lead to the bear case scenario. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
AI infrastructure orders reached $2.1 billion in Q2 FY2026, suggesting Cisco is a primary beneficiary of the hyperscaler build-out. The Splunk integration is accelerating the shift to high-margin recurring revenue, with ARR now exceeding $31 billion and software revenue growing 21% YoY.
Bear Case
Operating margins have compressed 180 basis points to 20.8% due to a 400% spike in memory costs and a lower-margin product mix. Insider selling of $103.8 million and zero purchases in the last year signal that management believes the stock is overvalued at current levels.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Normalization of AI Infrastructure Orders As hyperscalers complete their initial build-out, the 'lumpy' nature of demand will become apparen...
Near-Term (0-6 months)Impact: High
Margin Compression Disclosure Continued reporting of operating margin erosion below the 21% level will force a re-evaluation of Cisco's pric...
Long-Term (18+ months)Impact: Moderate
Cisco is at a critical juncture where its stock price has reached multi-year highs on AI optimism, yet fundamental profitability is declinin...
Primary Risks
Concern: High
Competitive Disruption in Data Centers Arista Networks and Nvidia are gaining share in high-performance AI networking, which could permanent...
Concern: Medium
Memory and Component Cost Inflation A sustained spike in commodity costs could lead to further margin compression if Cisco is unable to pass...
Concern: Medium
The stewardship verdict is mixed. While the board is highly independent and includes world-class expertise from directors like Daniel Schulm...
Recent Activity
2026-02-12SEC Filing (8-K)
-12.32%Cisco reports Q2 FY 2026 with double-digit revenue and EPS growth, exceeding guidance.
2024-08-15SEC Filing (8-K)
+6.80%Cisco reports Q4 FY 2024 with revenue decline but strong margins and growth in software/ARR.
2023-11-16SEC Filing (8-K)
-9.83%Excerpt: (EX-99.1) EX-99.1 Exhibit 99.1 Press Contact: Investor Relations Contact: Robyn Blum Sami Badri Cisco Cisco 1 (408) 930-8548 1 (469) 420-4834 rojenkin@cisco.com sambadri@cisco.com CISCO REPORTS FIRST QUARTER EARNINGS News Summary:...
2023-02-16SEC Filing (8-K)
+5.24%Excerpt: (EX-99.1) EX-99.1 Exhibit 99.1 Press Contact: Investor Relations Contact: Robyn Blum Marilyn Mora Cisco Cisco 1 (408) 930-8548 1 (408) 527-7452 rojenkin@cisco.com marilmor@cisco.com CISCO REPORTS SECOND QUARTER EARNINGS News...
2022-08-18SEC Filing (8-K)
+5.81%Cisco reports Q4 FY 2022 with flat revenue and strong full-year performance.
Valuation Table
9.8/10Decision Grade
Scenario Range
$38
Bear
$60
Base
$75
Bull
$79