Cisco Systems Inc (CSCO) stock analysis
Cisco Systems Inc (CSCO) clears 3 of this site's 8 mechanical value filters, 4 of 8 Buffett-style checks and 3 of 5 Lynch-style checks. At $104.89 it trades 89.7% above this site's neutral DCF value (a margin of safety of -89.7%). Its earnings quality rates Strong and it returns +2.1% to shareholders net of dilution. Figures are as of October 23, 2026, from SEC filings and market data refreshed weekly; this is educational analysis, not investment advice.
Data as of October 23, 2026. Refreshed weekly from SEC filings and market data.
What does Cisco do?
Cisco sells the networking gear (switches, routers, wireless), security and collaboration software that connect and protect corporate networks, and increasingly earns subscription revenue. It bought Splunk in 2024 to add data analytics.
Brands and businesses it owns
- Webex
- Meraki
- Splunk
- Duo
- ThousandEyes
- AppDynamics
What stands out about Cisco?
- The share price implies 24.5% yearly growth. At $104.89, CSCO's free cash flow of $3.24 per share would have to grow 24.5% a year, fading to 2.5% by year 10, for this site's DCF (10% discount rate) to match the price. This site's baseline starts at 8%, so the price asks for more growth than the baseline. Change the assumptions.
- Misses 3 of the 8 value filters. It fails Trailing P/E < 25 (31.17), PEG Ratio < 1.5 (2.86) and Price/Book < 8 (8.22); the other 3 pass and 2 were not evaluated. See every filter.
- The margin of safety is rising. It went from -113% on Oct 7 to -90% on Oct 23 across 5 weekly readings. See the trend.
- Strongest against peers: return on equity. At 27% (peer median 20%) it ranks 3rd of 10 among telecom & communications stocks this site tracks. See the ranking.
- Weakest against peers: dividend yield. At 1.58% (peer median 3.88%) it ranks 5th of 6 among telecom & communications stocks this site tracks. See the ranking.
How has Cisco's share price moved?
The interactive price chart needs JavaScript.
Is Cisco undervalued? The value diligence check
Every value-investing signal this site computes for this stock, gathered in one place: the same real numbers from the tools below, not a new score.
- Margin of safety (DCF) -89.7%
- P/E vs. its own history 31.2x · near the expensive end Real range: 15.7x–34.3x over 5 years (net income per diluted share from each fiscal year's 10-K, paired with the real closing price at that fiscal year-end).
- Wall St. analyst rating Buy · 3.83/5 35 analysts this month: 6 strong buy, 17 buy, 12 hold, 0 sell, 0 strong sell (Finnhub). Down from 3.89 last month.
- Earnings quality (is the profit real?) Strong · 1 watch Beneish M-score −2.37 · accruals −0.7% of assets · 116% of profit arrived as cash · stock comp 6.0% of revenue · share count −0.9% a year. From the latest 10-K (year to Jul 2026) - see the Earnings Quality Screener for how each check is scored.
- Shareholder yield (cash back to owners) +2.1% net Latest fiscal year (2026): dividends 1.6% + buybacks 1.5% − stock comp 0.9%, as a share of today's market cap. Over 14 years its split-adjusted share count fell 26%. See Shareholder Yield Leaders.
- Capital needed to grow (See's test) $118.02 per $1 of new profit · Capital-hungry · but only 21% return on capital Operating profit $13B → $13B, capital needed $30B → $62B, 2017–2026 (3-year averages); return on capital now 21% before tax. Buffett's See's Candies needed $0.42 per $1 of new profit, FlightSafety $3.20, a typical grower about $5. See Capital-Light Compounders.
- PEG (growth at a reasonable price) 2.86 · Well above fair P/E 31.2× ÷ 10.9% a year of growth behind it. 332nd lowest of 447 stocks with a usable PEG. Lynch's fair value is a PEG of 1; a very high PEG usually means almost no growth, a very low one a profit spike. See PEG Ratio Ranking.
- Compounder lenses (4) 2 of 4 · misses capital-light, price Capital-light growth: not cleared (profit grew 1.0×, under 2×); Profit is real: cleared; Cash to owners: cleared; Fair price (PEG): not cleared (PEG 2.86, over 1.5). See Compounders at a Fair Price, which also lets you move the PEG bar.
- Value trap check Clear
- Munger's Inversion Check 3 flags
- Standing vs. sector peers 4 of 7 measures above the median Compared with the 9 other telecom & communications stocks this site tracks: 2 in the top third, 1 in the bottom third.
- Dividend payout sustainability 0/6 · clean
How does Cisco compare with its peers?
4 of 7 measures sit above the median of the 9 other telecom & communications stocks tracked here, 2 in the top third and 1 in the bottom third.
- P/E ratiolower is cheaper · peer median 31.2× 31.2× –5th of 9
- Free-cash-flow yieldhigher is cheaper · peer median 3.6% 3.1% –7th of 10
- Return on equityhigher is better · peer median 20% 27% ✓3rd of 10
- Net marginhigher is better · peer median 14.3% 20.9% ✓3rd of 10
- Revenue growthhigher is better, year on year · peer median 10.0% 11.8% –4th of 10
- Debt / equitylower is safer · peer median 1.03 0.59 –4th of 10
- Dividend yieldamong dividend payers · peer median 3.88% 1.58% ✕5th of 6
Peers are the stocks this site tracks in the same sector group, not every listed competitor. The bar runs from the weakest peer (left) to the strongest (right); the tick is the middle. Measures that don't apply to a sector (cash-flow yield for banks, debt for financials) are left out.
What would Buffett & Lynch say?
Buffett's checklist is built around durable, profitable businesses bought at sensible prices, and CSCO doesn't clear enough of it yet. In its favor: CSCO is currently earning a strong return on shareholders' equity, and has kept that profitability up over five years, not just this year, converts sales into profit at healthy margins, and earns many times its interest expense, so debt service isn't a worry. Where it comes up short: CSCO carries more debt relative to equity than he typically tolerates, hasn't grown earnings per share fast enough over five years to impress him, is trading above what a conservative discounted-cash-flow estimate says it's worth right now, and trades rich relative to owner earnings, the real cash the business could pay out.
- ROE (TTM) > 11% ✓
- ROE (5yr avg) > 11% ✓
- Debt/Equity < 0.5 ✕
- Pretax margin > 15% ✓
- EPS growth (5yr) > 7% ✕
- Interest coverage > 5x ✓
- Trading below intrinsic value (DCF) ✕
- Price vs. owner earnings < 25x ✕
- Bonus: returning capital via buybacks FY2026
Lynch looked for growth stories that weren't overpriced for that growth, and CSCO falls short of his bar. In its favor: CSCO is growing earnings 20-50% a year, his classic fast-grower zone, isn't asking too much even by a fast grower's usual richer multiple, and is generating real cash to back up a fast grower's higher price tag. Where it comes up short: CSCO doesn't clear the tighter PEG bar a fast grower needs to justify its pace, and is leaning on more debt than he liked a growth story to carry.
- PEG < 1 (stricter for fast growers) ✕
- EPS growth 20%-50% ✓
- Debt/Equity < 0.5 ✕
- P/E < 40 ✓
- Price/FCF < 40 ✓
Quantitative approximations of each investor's documented approach, not endorsed by either investor or their estates - commentary, not this site's actual ranking criteria. Buffett never published a numeric checklist: only 2 of his 8 checks here trace to his own documented concepts ("owner earnings," from his 1986 shareholder letter, and "price is what you pay, value is what you get," his case against fixed P/E/P/B ceilings) - the other 6 (ROE, debt, margins, growth, interest coverage) use commonly-cited thresholds that are not numbers he himself published. The 8 hard filters below (plus the Munger check and Graham margin of safety) are this site's real, mechanical screen and are computed completely independently of the checklists above.
Berkshire Hathaway's own filing
Which of the 8 value filters does Cisco pass?
- Market Cap > $25B $413.5B
- Trailing P/E < 25 31.17
- PEG Ratio < 1.5 2.86
- Price/Book < 8 8.22
- Price/Sales < 7 6.53
- EPS Growth YoY > -5% +51.1%
- vs 50-day MA (±12%) Not evaluated †
- vs 200-day MA (±12%) Not evaluated †
What is Cisco's margin of safety?
-113% on 2026-10-07 → -90% on 2026-10-23 (5 weekly readings).
Where is Cisco in its 52-week range?
What is the short interest in Cisco?
51,066,484 shares short as of 2026-09-30 (FINRA settlement date). Reported twice a month, so this only changes roughly every two weeks, not daily.
What could go wrong with Cisco? Munger's inversion check
"Invert, always invert." Instead of reasons to buy, these are reasons to hesitate, not a verdict, and not everything worth knowing about a business.
- Margin of safety, even in the bull case -12%
- Short interest under 5% of float 1.3%
- Passes most of the 6 fundamental filters 3/6 passed
- Price run-up backed by value, not just momentum +56% off 52wk low
- Debt/equity stable since 2017 0.46 → 0.46
Doesn't cover circle of competence, management quality, or accounting concerns: those need judgment, not data.
How much have Cisco shareholders gained per year?
Earnings growth per share plus dividend.
An earnings-based proxy, not a stock-price total return - it doesn't capture multiple expansion/contraction or reinvested dividends. EPS from CSCO's own 10-K filings; dividend yield is the current trailing yield on today's price, from the same weekly fetch as the rest of this site.
What do Cisco's 10-year financials show?
From CSCO's own 10-K filings (SEC EDGAR): up to the last 10 fiscal years. Press any year's bars for the exact figures.
Frequently asked questions about Cisco
What kind of company is Cisco?
Cisco sells the networking gear (switches, routers, wireless), security and collaboration software that connect and protect corporate networks, and increasingly earns subscription revenue. It bought Splunk in 2024 to add data analytics. Brands and businesses it owns include Webex, Meraki, Splunk, Duo, ThousandEyes and AppDynamics. This site groups it with Communications stocks.
Is Cisco trading above or below its DCF value?
At $104.89, CSCO trades 89.7% above this site's neutral DCF value of $55.30 per share, a margin of safety of −89.7%. That DCF projects free cash flow for 10 years, with growth starting at 8% and fading to 2.5%, discounted at 10%; it is one set of assumptions, not a forecast. Test your own in the Intrinsic Value Calculator.
How many of this site's 8 value filters does Cisco pass?
CSCO passes 3 of 8. It passes Market Cap > $25B ($413.5B), Price/Sales < 7 (6.53) and EPS Growth YoY > -5% (+51.1%). It misses Trailing P/E < 25 (31.17), PEG Ratio < 1.5 (2.86) and Price/Book < 8 (8.22). vs 50-day MA (±12%) and vs 200-day MA (±12%) were not evaluated, because the moving-average checks only run on stocks that clear the fundamentals first. The 8-filter list shows every stock that passes all of them.
What growth is Cisco's share price pricing in?
At $104.89, CSCO's free cash flow of $3.24 per share would have to grow 24.5% a year, fading to 2.5% by year 10, for this site's DCF (10% discount rate) to match the price. This site's baseline starts at 8%, so the price asks for more growth than the baseline. Change the assumptions.
Are Cisco's reported earnings reliable?
This site's earnings-quality check rates CSCO Strong · 1 watch. Beneish M-score −2.37 · accruals −0.7% of assets · 116% of profit arrived as cash · stock comp 6.0% of revenue · share count −0.9% a year. From the latest 10-K (year to Jul 2026). Concerns: stock-based compensation (on watch). The five checks are the Beneish M-score (manipulation risk), accruals, cash conversion, stock-based compensation and share dilution; the Earnings Quality Screener shows how each is graded.
Does Cisco raise any of Munger's inversion flags?
CSCO fails 3 of the 5 tests in this site's Munger-style inversion check, so it raises 3 flags: Margin of safety, even in the bull case (-12%); Passes most of the 6 fundamental filters (3/6 passed); and Price run-up backed by value, not just momentum (+56% off 52wk low). It passes Short interest under 5% of float and Debt/equity stable since 2017. Munger's habit was to invert the question and look for reasons to hesitate. These flags are data-driven prompts, not a verdict, and they cannot judge management, competitive position or accounting risk.
Where do these numbers come from?
- Financial statements: Cisco's 10-K annual report for the year ended Jul 25, 2026, filed Sep 2, 2026 (filing index). Every earlier year in the 10-year financials comes from the company's older 10-K filings, all listed on SEC EDGAR.
- Prices and market data: quotes, P/E and analyst ratings from Finnhub; daily price history and the 52-week range from Twelve Data, both refreshed weekly. Short interest comes from FINRA, reported twice a month.
- How to check a figure: click any number in the card above to see its exact source, and read the Editorial Standards for every rule behind the checks.
About this Cisco Systems Inc analysis
This page shows every value-investing check the site runs on Cisco Systems Inc (CSCO) in one place: the 8 mechanical filters, the Buffett and Lynch checklists, a margin of safety from a disclosed DCF, earnings quality, shareholder yield and how it ranks against its sector peers. The numbers come from SEC filings and public market data, refreshed weekly, and the same rules apply to every stock on the stock list. See Editorial Standards for the sources and the rules, or run your own filters in the stock screener.