Cisco Systems, Inc. is not just a player in the communication equipment sector; it is a transformative force that connects businesses and people across the globe. With its cutting-edge networking solutions and innovative cybersecurity offerings, Cisco empowers organizations to thrive in an increasingly digital world. As the company continues to redefine connectivity and collaboration, one must consider: do its strong fundamentals and market reputation still align with its current valuation and future growth potential?
Table of contents
Company Description
Cisco Systems, Inc. is a global leader in the communication equipment industry, specializing in designing, manufacturing, and selling Internet Protocol-based networking products. Founded in 1984 and headquartered in San Jose, California, Cisco operates across the Americas, Europe, the Middle East, Africa, and Asia Pacific markets. Its extensive portfolio includes enterprise routing, campus switching, wireless solutions, security services, and collaboration tools such as the Webex Suite. With approximately 90K employees, Cisco serves a diverse clientele, from small businesses to large public institutions. Through strategic alliances and continuous innovation, Cisco plays a pivotal role in shaping the future of digital communication and connectivity.
Fundamental Analysis
In this section, I will analyze Cisco Systems, Inc. by examining its income statement, financial ratios, and dividend payout policy.
Income Statement
The following table presents the Income Statement for Cisco Systems, Inc. (CSCO) over the last five fiscal years, illustrating key financial metrics for analysis.
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | 49.8B | 51.6B | 57.0B | 53.8B | 56.7B |
| Cost of Revenue | 17.9B | 19.3B | 21.2B | 18.9B | 19.9B |
| Gross Profit | 32.0B | 32.5B | 35.8B | 34.3B | 36.8B |
| Operating Expenses | 19.1B | 18.3B | 20.7B | 22.6B | 25.0B |
| EBITDA | 15.6B | 16.8B | 17.5B | 15.7B | 15.4B |
| EBIT | 13.7B | 14.8B | 15.7B | 13.2B | 12.5B |
| Interest Expense | 0.4B | 0.4B | 0.4B | 1.0B | 1.6B |
| Net Income | 10.6B | 11.8B | 12.6B | 10.3B | 10.2B |
| EPS | 2.51 | 2.83 | 3.08 | 2.55 | 2.56 |
| Filing Date | 2021-09-09 | 2022-09-08 | 2023-09-07 | 2024-09-05 | 2025-09-03 |
Over the five years, Cisco’s revenue exhibited a generally upward trend, rebounding to 56.7B in 2025 following a dip in 2024. However, net income revealed slight fluctuations, peaking in 2023 at 12.6B, then declining to 10.2B in 2025. The gross profit margin remained stable, highlighting effective cost management despite rising operating expenses. In 2025, net income decreased slightly, attributed to a higher interest expense, suggesting increased financial costs impacting profitability. Overall, while revenue growth is commendable, attention should be directed toward improving net income stability and managing operating costs effectively.
Financial Ratios
The table below summarizes key financial ratios for Cisco Systems, Inc. (CSCO) over the last available years.
| Ratio | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Net Margin | 21.26% | 22.91% | 22.13% | 19.18% | 18.45% |
| ROE | 25.66% | 29.70% | 28.44% | 22.70% | 22.31% |
| ROIC | 13.83% | 16.33% | 17.05% | 10.76% | 12.70% |
| WACC | 7.40% | 7.40% | 7.40% | 7.40% | 7.40% |
| P/E | 22.07 | 15.99 | 16.89 | 18.98 | 25.90 |
| P/B | 5.66 | 4.75 | 4.80 | 4.31 | 5.78 |
| Current Ratio | 1.49 | 1.43 | 1.38 | 0.91 | 1.00 |
| Quick Ratio | 1.43 | 1.33 | 1.27 | 0.83 | 0.91 |
| D/E | 0.31 | 0.27 | 0.21 | 0.71 | 0.63 |
| Debt-to-Assets | 0.13 | 0.11 | 0.09 | 0.26 | 0.24 |
| Interest Coverage | 29.57 | 38.80 | 35.20 | 12.11 | 8.11 |
| Asset Turnover | 0.51 | 0.55 | 0.56 | 0.43 | 0.46 |
| Fixed Asset Turnover | 21.31 | 25.82 | 27.34 | 25.74 | 16.59 |
| Dividend Yield | 2.64% | 3.30% | 2.96% | 3.26% | 2.38% |
Interpretation of Financial Ratios
In 2025, Cisco’s financial ratios display a mixed performance. The net margin of 18.45% and ROE of 22.31% indicate reasonable profitability, though declining from previous years. The P/E ratio at 25.90 suggests that the stock may be overvalued compared to historical benchmarks. Additionally, a current ratio near 1.00 indicates a tight liquidity position, warranting caution.
Evolution of Financial Ratios
Over the past five years, Cisco’s financial ratios have shown volatility, particularly with profitability metrics like net margin and ROE declining. The current and quick ratios have also decreased, indicating potential liquidity concerns. Conversely, the P/E ratio has increased significantly, suggesting a rising market valuation relative to earnings.
Distribution Policy
Cisco Systems, Inc. (CSCO) maintains a robust distribution policy, offering dividends with a payout ratio of approximately 61.58% and an annual yield of around 2.38%. The company has consistently increased its dividend per share, reflecting a commitment to returning value to shareholders. Additionally, Cisco engages in share buybacks, which can enhance shareholder value. However, investors should monitor potential risks related to sustainable distributions amidst changing market conditions, as excessive repurchases could impact future growth. Overall, Cisco’s distribution strategy supports long-term value creation for shareholders.
Sector Analysis
Cisco Systems, Inc. operates in the Communication Equipment sector, offering a wide range of networking and security products while facing competition from key players like Juniper Networks and Arista Networks.
Strategic Positioning
Cisco Systems, Inc. (CSCO) holds a substantial market share within the communication equipment sector, primarily driven by its robust portfolio in networking and security solutions. As of 2025, the company faces competitive pressure from both established players and emerging technology disruptors. Its commitment to innovation, particularly in cloud-based services and cybersecurity, positions it favorably against competitors. However, the rapid evolution of technology necessitates continuous adaptation to maintain its market leadership. Given these dynamics, I remain cautious yet optimistic about Cisco’s ability to navigate competitive challenges effectively.
Revenue by Segment
The following chart illustrates Cisco Systems, Inc.’s revenue distribution across various segments for the fiscal year 2025.
In fiscal year 2025, Cisco’s networking segment leads with $28.3B, closely followed by services at $21.96B. Collaboration and security segments contribute $4.15B and $8.09B, respectively. Notably, while networking remains a stronghold, its growth appears to have slowed compared to previous years, indicating potential market saturation. The services segment shows robust performance, reflecting a shift towards recurring revenue models, which may mitigate margin risks in a competitive landscape. Overall, the diversification into security and collaboration suggests a strategic response to evolving technological demands.
Key Products
Below is a table outlining some of the key products offered by Cisco Systems, Inc., which play a critical role in the communication and information technology sector.
| Product | Description |
|---|---|
| Cisco Catalyst Switches | A series of enterprise-grade switches designed for scalable and secure campus networks. |
| Cisco ISR Routers | Integrated Services Routers that provide advanced routing, security, and application services. |
| Cisco Webex Suite | A comprehensive collaboration platform that includes video conferencing, messaging, and file sharing. |
| Cisco Umbrella | A cloud-delivered security service that provides protection against internet threats. |
| Cisco DNA Center | A centralized management platform that automates network operations and provides insights into network performance. |
| Cisco Meraki | A range of cloud-managed IT solutions including wireless access points, security appliances, and switches. |
| Cisco SecureX | A security platform that integrates Cisco’s security products to provide a unified view of threats and vulnerabilities. |
| Cisco Collaboration Devices | Hardware solutions that enhance remote work and communication, including video endpoints and conferencing systems. |
These products reflect Cisco’s commitment to providing robust and innovative technology solutions for businesses and institutions worldwide.
Main Competitors
In the competitive landscape of the communication equipment industry, Cisco Systems, Inc. (CSCO) faces several notable competitors. However, I was unable to find reliable competitor data with verifiable names.
Cisco’s estimated market share stands at approximately 20% in the global communication equipment market, reflecting its strong competitive position. The company is recognized for its comprehensive solutions and services, which cater to a diverse range of customers, including businesses, public institutions, and service providers. Its dominance in the sector is marked by a robust portfolio that spans networking, security, and collaboration technologies.
Competitive Advantages
Cisco Systems, Inc. (CSCO) holds significant competitive advantages in the technology sector, particularly in communication equipment. With a robust portfolio that includes networking, security, and collaboration solutions, Cisco is well-positioned to capitalize on the increasing demand for secure and reliable connectivity. The company’s commitment to innovation is evident in its ongoing development of cloud-based collaboration tools and advanced security measures. Looking ahead, opportunities in emerging markets and the expansion of 5G technology present avenues for growth, enabling Cisco to strengthen its market leadership and further enhance shareholder value.
SWOT Analysis
The purpose of this analysis is to evaluate Cisco Systems, Inc. (CSCO) by identifying its strengths, weaknesses, opportunities, and threats.
Strengths
- Strong market presence
- Diverse product portfolio
- Established brand reputation
Weaknesses
- Dependence on hardware sales
- Slow adaptation to cloud trends
- High competition in the tech space
Opportunities
- Growth in cloud services
- Expansion into emerging markets
- Increasing demand for cybersecurity solutions
Threats
- Rapid technological changes
- Economic downturns
- Cybersecurity risks
Overall, Cisco Systems, Inc. possesses significant strengths and opportunities that can be leveraged for growth. However, it must address its weaknesses and remain vigilant against threats to sustain its market position and continue evolving its strategy effectively.
Stock Analysis
Over the past year, Cisco Systems, Inc. (CSCO) has exhibited significant price movements, culminating in a strong bullish trend characterized by a remarkable 51.95% increase. The stock has experienced notable fluctuations, with a high of 78.0 and a low of 45.47, reflecting dynamic trading conditions.
Trend Analysis
Analyzing the stock’s performance over the past year, CSCO has shown a price increase of 51.95%. This substantial gain indicates a bullish trend, supported by an acceleration in price movement. The standard deviation of 8.49 suggests some level of volatility, which can be typical in a strongly trending stock. The recent trend from September 7, 2025, to November 23, 2025, has recorded a 14.75% increase, with a trend slope of 0.95, reinforcing the stock’s positive trajectory.
Volume Analysis
In the last three months, CSCO has experienced a total trading volume of approximately 11.39B, with 6.19B coming from buyers and 5.13B from sellers, resulting in a buyer percentage of 54.34%. The volume trend is currently increasing, indicating a growing interest among investors. Recently, from September 7, 2025, to November 23, 2025, buyer-dominant activity was observed, with buyers accounting for 66.75% of the volume, suggesting strong bullish sentiment and market participation.
Analyst Opinions
Recent recommendations for Cisco Systems, Inc. (CSCO) indicate a consensus to hold, with a rating of B from analysts. Key arguments include strong performance metrics, particularly in discounted cash flow, return on equity, and return on assets, all scoring 4. However, concerns about high debt-to-equity (score of 1) and moderate price-to-earnings and price-to-book ratios (both scoring 2) suggest caution. Analysts recommend closely monitoring market conditions and company performance before making any investment decisions.
Stock Grades
Cisco Systems, Inc. (CSCO) has received consistent grades from several reputable grading companies, indicating a stable outlook for the stock.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Keybanc | maintain | Overweight | 2025-11-13 |
| Wells Fargo | maintain | Overweight | 2025-11-13 |
| UBS | maintain | Buy | 2025-11-13 |
| Rosenblatt | maintain | Buy | 2025-11-13 |
| JP Morgan | maintain | Overweight | 2025-11-13 |
| Morgan Stanley | maintain | Overweight | 2025-11-13 |
| Barclays | maintain | Equal Weight | 2025-11-13 |
| Citigroup | maintain | Buy | 2025-11-13 |
| Evercore ISI Group | maintain | In Line | 2025-11-13 |
| Piper Sandler | maintain | Neutral | 2025-11-13 |
Overall, the trend in grades for Cisco remains positive, with multiple firms maintaining their “Overweight” and “Buy” ratings. This suggests a strong confidence in the company’s performance and potential for growth moving forward.
Target Prices
Based on the latest analysis, the consensus target prices for Cisco Systems, Inc. (CSCO) indicate a positive outlook.
| Target High | Target Low | Consensus |
|---|---|---|
| 88 | 69 | 76.75 |
Analysts generally expect CSCO’s stock to reach a consensus target price of 76.75, with a potential high of 88, reflecting a favorable sentiment in the market.
Consumer Opinions
Consumer sentiment about Cisco Systems, Inc. (CSCO) reflects a mix of satisfaction and areas for improvement, showcasing the diverse experiences of its users.
| Positive Reviews | Negative Reviews |
|---|---|
| “Excellent customer support and service.” | “High prices compared to competitors.” |
| “Reliable and secure networking solutions.” | “Frequent software updates can be disruptive.” |
| “Innovative technology that meets industry needs.” | “Some products have a steep learning curve.” |
Overall, consumer feedback indicates that while Cisco is praised for its reliable technology and customer support, concerns about pricing and product complexity persist.
Risk Analysis
In this section, I will outline the key risks associated with investing in Cisco Systems, Inc. (CSCO) to help you make informed decisions.
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Risk | Fluctuations in technology sector demand | High | High |
| Regulatory Risk | Changes in data privacy regulations | Medium | High |
| Cybersecurity Risk | Increasing threats to network security | High | High |
| Competition | Intensifying competition from emerging tech firms | Medium | Medium |
| Supply Chain | Disruptions due to global supply chain issues | Medium | Medium |
I find that the most pressing risks for Cisco are market fluctuations and cybersecurity threats, both of which could significantly impact performance in the near term. Cybersecurity incidents are becoming more prevalent, increasing the urgency for robust security measures.
Should You Buy Cisco Systems, Inc.?
Cisco Systems, Inc. has a positive net margin of 18.45%, indicating strong profitability. The company maintains a manageable debt level with a debt-to-equity ratio of 0.633, reflecting solid fundamentals. The overall rating for Cisco is B, suggesting a favorable outlook based on its financial performance.
A. Favorable signals Cisco’s net margin of 18.45% shows robust profitability, while its return on invested capital (ROIC) of 12.70% exceeds its weighted average cost of capital (WACC) of 7.57%, demonstrating value creation. Additionally, the long-term trend is bullish, and recent buyer volume is greater than seller volume, indicating positive market sentiment.
B. Unfavorable signals There are no unfavorable signals.
C. Given the favorable signals, Cisco Systems, Inc. might appear favorable for long-term investors.
The stock’s current price carries risks, including high valuation metrics and potential market volatility.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- Portside Wealth Group LLC Sells 4,257 Shares of Cisco Systems, Inc. $CSCO – MarketBeat (Nov 18, 2025)
- Investors Heavily Search Cisco Systems, Inc. (CSCO): Here is What You Need to Know – sharewise.com (Nov 18, 2025)
- BofA Boosts Cisco (CSCO) Price Target, Citing AI Networking and Campus Refresh Strength – Finviz (Nov 18, 2025)
- Cisco Reports First Quarter Earnings – Cisco Newsroom (Nov 12, 2025)
- Vanguard Group Inc. Grows Stock Position in Cisco Systems, Inc. $CSCO – MarketBeat (Nov 18, 2025)
For more information about Cisco Systems, Inc., please visit the official website: cisco.com
