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Cisco valuation

CISCO SYSTEMS, INC. · Nasdaq: CSCO · Enterprise software & IT · Updated Sep 25, 2026

Price-implied growth
16.5%
year-1 revenue growth the price implies at our base-case margin (base case: 7.7%)
Price-implied margin
35.6%
target operating margin at our base-case growth (base case: 24.6%)
Base-case model value
$74.90
range $49.35 – $109.67 (Bear–Bull)
Price vs. base case
+43%
reference price $106.95 (IEX last trade, Sep 24, 2026)
Market value
$426B
$106.95 × 3.982 bn diluted shares
WACC
8.4%
years 1–5, then moving to 8.9% (mature company)

Cisco's revenue grew 11.8% over the last twelve months and 3.6% a year over three years. Today's price of $106.95 implies 16.5% revenue growth in year 1, fading to 4.8% by year 10, at an operating margin of 24.6%.

Our base case continues the trend (7.7%, fading), moves the operating margin from 25.9% to 24.6% by year 5 and reinvests $0.19 of capital for each additional dollar of revenue. Discounted at 8.4%, that gives a base-case model value of $74.90 per share (bear $49.35, bull $109.67); the price is 43% above the base case.

Model value per share: bear, base, bull – and the price
Bear $49.35 – Bull $109.67Base: $74.90Base $74.90Bear $49.35Bull $109.67Price: $106.95Price $106.95

Bear: growth 5 percentage points lower, target margin 20% lower. Bull: growth 5 points higher, target margin 20% higher. Cost of capital and capital intensity as in the base case.

Model value = output of a fixed, published method; not a price target, not a recommendation. How the model works

How we got this number

1Historical base from the filingsReported fact

All figures come from the XBRL data in the company's SEC filings (10-K, 10-Q), in US dollars. "TTM" = trailing twelve months. EBITA = operating income before amortisation of acquired intangibles and before expensed acquired R&D – both consequences of past acquisitions, which the model does not extrapolate.

Revenue and EBITA
RevenueEBITA
0$20B$40B$60B$80B07/21 · Revenue: $49.8B07/21 · EBITA: $13.0B07/2107/22 · Revenue: $51.6B07/22 · EBITA: $14.3B07/2207/23 · Revenue: $57.0B07/23 · EBITA: $15.3B07/2307/24 · Revenue: $53.8B07/24 · EBITA: $12.9B07/2407/25 · Revenue: $56.7B07/25 · EBITA: $12.8B07/2507/26 · Revenue: $63.3B07/26 · EBITA: $16.3B07/26
Data tableFY07/2021FY07/2022FY07/2023FY07/2024FY07/2025FY07/2026
Revenue $49.8B$51.6B$57.0B$53.8B$56.7B$63.3B
Revenue growth –3.5%10.6%−5.6%5.3%11.8%
Operating income (EBIT) $12.8B$14.0B$15.0B$12.2B$11.8B$15.4B
+ Amortisation of acquired intangibles $215M$313M$282M$698M$1.03B$916M
EBITA $13.0B$14.3B$15.3B$12.9B$12.8B$16.3B
EBITA margin 26.2%27.7%26.9%23.9%22.6%25.7%
Effective tax rate 20.1%18.4%17.7%15.6%8.3%17.1%
Net income $10.6B$11.8B$12.6B$10.3B$10.2B$13.3B
Operating cash flow $15.5B$13.2B$19.9B$10.9B$14.2B$14.2B
Capital expenditure $692M$477M$849M$670M$905M$1.41B
Free cash flow (CFO − capex) $14.8B$12.7B$19.0B$10.2B$13.3B$12.8B
Operating invested capital ––−$12.6B−$20.9B−$11.4B−$8.14B
Sales / capital ––––––
ROIC ––––––

Operating invested capital = equity + financial debt incl. leases − cash − goodwill − acquired intangibles − equity-method stakes: the capital that organic growth actually ties up. ROIC = EBITA × (1 − tax rate) / operating capital (TTM column: incl. lease interest, latest balance sheet).

XBRL source of each line
  • revenue: us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax · 10-K · period end 2026-07-25 · 0000858877-26-000132
  • cost_of_revenue: us-gaap:CostOfGoodsAndServicesSold · 10-K · period end 2026-07-25 · 0000858877-26-000132
  • gross_profit: us-gaap:GrossProfit · 10-K · period end 2026-07-25 · 0000858877-26-000132
  • ebit: us-gaap:OperatingIncomeLoss · 10-K · period end 2026-07-25 · 0000858877-26-000132
  • pretax: us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest · 10-K · period end 2026-07-25 · 0000858877-26-000132
  • tax: us-gaap:IncomeTaxExpenseBenefit · 10-K · period end 2026-07-25 · 0000858877-26-000132
  • net_income: us-gaap:NetIncomeLoss · 10-K · period end 2026-07-25 · 0000858877-26-000132
  • da: us-gaap:DepreciationDepletionAndAmortization · 10-K · period end 2026-07-25 · 0000858877-26-000132
  • cfo: us-gaap:NetCashProvidedByUsedInOperatingActivities · 10-K · period end 2026-07-25 · 0000858877-26-000132
  • capex: us-gaap:PaymentsToAcquirePropertyPlantAndEquipment · 10-K · period end 2026-07-25 · 0000858877-26-000132
  • sbc: us-gaap:ShareBasedCompensation · 10-K · period end 2026-07-25 · 0000858877-26-000132
  • interest: us-gaap:InterestExpenseNonoperating · 10-K · period end 2026-07-25 · 0000858877-26-000132
  • amort: us-gaap:AmortizationOfIntangibleAssets · 10-K · period end 2026-07-25 · 0000858877-26-000132

2Cost of equity (CAPM)Market dataAssumption

kE = rf + β × ERP = 4.79% + 0.93 × 4.14% = 8.63%
  • rf 4.79% – 10-year US Treasury yield on Sep 1, 2026, the date of the equity risk premium estimate (the two must match; today: 5.18% on Sep 24, 2026) (U.S. Treasury).
  • ERP 4.14% – implied equity risk premium of the S&P 500 by Aswath Damodaran as of Sep 1, 2026 (NYU Stern). It is backed out of current index prices and expected cash flows, not historical averages.
  • β 0.93 – bottom-up beta: the "Telecom. Equipment" industry (57 US firms, Damodaran, January 2026) has a cash-corrected unlevered beta of 0.89. Relevered with Cisco's leverage (debt incl. leases / market value = 5.8%):
    β = βU × (1 + (1 − t) × D/E) = 0.89 × (1 + 0.75 × 0.058) = 0.93
  • In the mature state (from year 10) we set β = 1: kE = 4.79% + 4.14% = 8.93%, the market's expected return. In years 6–10 the cost of capital moves there linearly.

3Cost of debtReported factAssumption

Interest coverage = EBIT / interest expense (TTM) = $15.4B / $1.47B = 10.5x. In Damodaran's table for large non-financial firms (January 2026) this maps to a synthetic rating of Aaa/AAA with a 0.40% default spread.

kD = (rf + spread) × (1 − t) = (4.79% + 0.40%) × (1 − 25%) = 3.89%

Tax rate 25%: 21% federal plus about 4% state taxes (marginal rate).

4Weighted average cost of capital (WACC)Market dataModel output

WACC = E/(D+E) × kE + D/(D+E) × kD = 94.6% × 8.63% + 5.4% × 3.89% = 8.38%

E = market value $426B (Sep 24, 2026); D = financial debt incl. lease liabilities $24.5B (book value as a proxy). This WACC applies to years 1–5; by year 10 it moves to 8.93%, the cost of capital of an average mature company (rf + ERP) – the rate at which Damodaran's implied premium discounts the market beyond year 5.

5Forecast and discounted cash flowsAssumptionModel output

DriverBase caseHow it is set
Revenue growth, year 17.7%Average of the 3-year CAGR (3.6%) and trailing-twelve-month growth (11.8%); fades linearly to 4.8% by year 10.
Operating margin25.9% → 24.6%Currently 25.9% (EBITA incl. lease interest); target in year 5: the company's own recent level (24.6%, average of three fiscal years and TTM), as it is above the industry (20.9%).
Tax rate14.2% → 25%Effective rate of the last three years (years 1–5), then moving to the marginal rate.
Sales / capital5.14Reinvestment = revenue increase / 5.14. No positive operating capital: 2× the industry value (2.57).
Terminal ROIC25.5%The lower of the company's return on capital (–) and the industry's (25.5%), but at least the cost of capital (8.9%). Terminal reinvestment rate = g / ROIC = 18.8%.
Growth after year 104.79%= risk-free rate (Damodaran's default; his implied premium is computed the same way).

Industry values: Damodaran, "Telecom. Equipment", January 2026 (pre-tax lease-adjusted operating margin; sales / invested capital; after-tax return on capital).

Year12345678910
Revenue growth7.7%7.4%7.0%6.7%6.4%6.1%5.8%5.4%5.1%4.8%
Revenue$68.2B$73.2B$78.4B$83.6B$89.0B$94.4B$99.8B$105B$111B$116B
Operating margin25.6%25.4%25.1%24.9%24.6%24.6%24.6%24.6%24.6%24.6%
Operating income$17.5B$18.6B$19.7B$20.8B$21.9B$23.2B$24.6B$25.9B$27.2B$28.5B
Tax rate14.2%14.2%14.2%14.2%14.2%16.3%18.5%20.7%22.8%25.0%
NOPAT$15.0B$15.9B$16.9B$17.8B$18.8B$19.4B$20.0B$20.6B$21.0B$21.4B
− Reinvestment$946M$976M$1.00B$1.02B$1.04B$1.05B$1.06B$1.05B$1.05B$1.03B
= FCFF$14.0B$15.0B$15.9B$16.8B$17.8B$18.4B$19.0B$19.5B$20.0B$20.4B
WACC8.4%8.4%8.4%8.4%8.4%8.5%8.6%8.7%8.8%8.9%
Discount factor0.9230.8510.7860.7250.6690.6170.5680.5220.4800.441
Present value$13.0B$12.7B$12.5B$12.2B$11.9B$11.3B$10.8B$10.2B$9.58B$8.97B
ROIC (model capital)121.6%120.1%118.6%117.1%115.6%112.3%109.1%105.8%102.6%99.5%
Terminal value = NOPAT11 × (1 − g/ROIC) / (WACCmature − g) = $22.4B × (1 − 4.79% / 25.5%) / (8.93% − 4.79%) = $440B
EV = $113B + $440B × 0.441 = $307B

The terminal value is 63% of enterprise value. Cash flows are discounted at year end with the cumulative cost of capital of each year.

6From enterprise value to equity valueReported factModel output

From enterprise value to equity value, compared with the market value
Model valueMarket value
PV of FCFF, years 1–10PV of FCFF, years 1–10: $113B$113BPV of terminal valuePV of terminal value: $194B$194BEnterprise valueEnterprise value: $307B$307BCash & securitiesCash & securities: $15.9B$15.9BDebt incl. leasesDebt incl. leases: −$24.5B−$24.5BEquity value (model)Equity value (model): $298B$298BMarket capitalisationMarket capitalisation: $426B$426B
Enterprise value$307B
+ Cash and equivalents us-gaap:CashAndCashEquivalentsAtCarryingValue · 2026-07-25$7.22B
+ Short-term marketable securities us-gaap:ShortTermInvestments · 2026-07-25$8.70B
− Long-term debt us-gaap:LongTermDebtNoncurrent · 2026-07-25−$19.4B
− Current debt us-gaap:LongTermDebtCurrent · 2026-07-25−$3.50B
− Operating lease liabilities us-gaap:OperatingLeaseLiability · 2026-07-25−$1.65B
= Equity value (model)$298B
÷ Diluted shares WeightedAverageNumberOfDilutedSharesOutstanding · 2026-04-253.982 bn
= Base-case model value per share$74.90
Reference price (IEX last trade) · 2026-09-24 19:59 UTC$106.95

Lease liabilities count as debt; in turn, the operating margin excludes the interest component of lease payments. Share count: diluted weighted-average shares, latest quarter. Data provided for free by IEX. By accessing or using IEX Historical Data, you agree to the IEX Historical Data Terms of Use.

7Scenarios and reverse DCF: what the price impliesModel output

CaseGrowth Y1Target marginModel value per sharePrice vs. case
Bear2.7%19.7%$49.35+117%
Base7.7%24.6%$74.90+43%
Bull12.7%29.5%$109.67−2%
Implied by the price16.5%35.6%$106.95±0%

Reverse DCF: holding everything else fixed, we solve for the single assumption at which the model value equals the price – the starting growth rate (16.5%), the target margin (35.6%) or the cost of capital (7.1% instead of 8.4%).

Revenue growth: history, model path and market-implied path
Historical growthModel growth pathMarket-implied path
−10%0%10%20%2023: 10.6%'232024: −5.6%'242025: 5.3%'252026: 11.8%'26Model growth path, year 1: 7.7%Model growth path, year 2: 7.4%Model growth path, year 3: 7.0%Model growth path, year 4: 6.7%Model growth path, year 5: 6.4%Model growth path, year 6: 6.1%Model growth path, year 7: 5.8%Model growth path, year 8: 5.4%Model growth path, year 9: 5.1%Model growth path, year 10: 4.8%Market-implied path, year 1: 16.5%Market-implied path, year 2: 15.2%Market-implied path, year 3: 13.9%Market-implied path, year 4: 12.6%Market-implied path, year 5: 11.3%Market-implied path, year 6: 10.0%Market-implied path, year 7: 8.7%Market-implied path, year 8: 7.4%Market-implied path, year 9: 6.1%Market-implied path, year 10: 4.8%Y1Y10

8Sensitivity: WACC × terminal growthModel output

Base-case model value per share for other costs of capital (rows: WACC of years 1–5; the shift applies to all years) and other growth after year 10 (columns). Outlined: base case. Reference price: $106.95.

WACC \ g2.8%3.3%3.8%4.3%4.8%
7.4%$69.02$74.02$80.16$87.91$98.03
7.9%$62.87$66.85$71.63$77.49$84.89
8.4%$57.70$60.93$64.73$69.30$74.90
8.9%$53.31$55.97$59.05$62.68$67.04
9.4%$49.53$51.74$54.28$57.22$60.69

Multiples vs. peers

Peer group "Enterprise software & IT" within our coverage. Ratios use trailing-twelve-month figures and market values as of Sep 24, 2026. EV = market value + debt incl. leases + minorities − cash.

CompanyMarket valueImpliedgrowthBasegrowthPrice vs.base caseEV/EBITDAP/EP/SEBIT-marginGrowthlast FY
Oracle $418B16.5%16.0%+2%17.1x22.1x5.8x 32.1%17.3%
Salesforce $196B10.5%10.5%±0%17.9x20.3x4.5x 19.9%9.6%
Adobe $94.5B−6.7%11.3%−52%9.4x13.0x3.6x 35.7%10.5%
ServiceNow $143B30.7%22.3%+39%53.2x85.4x9.7x 11.4%20.9%
IBM $216B7.1%5.8%+7%19.2x20.2x3.1x 17.9%7.6%
Cisco $426B16.5%7.7%+43%27.0x32.1x6.7x 24.3%11.8%
Peer median10.5%11.3%17.9x20.3x4.5x19.9%10.5%

Median excludes Cisco. "n/m": negative or not meaningful.

What management says

Short, attributed excerpts from the company's own latest earnings release (SEC Form 8-K, Exhibit 99.1). Quotes are reproduced verbatim; they are management's statements, not ours.

Earnings release
Earnings release · Form 8-K · filed Aug 12, 2026 · Document at the SEC

“We delivered a very strong close to fiscal 2026, marking another record year for Cisco. Our record performance is a testament to the accelerated pace of innovation and the excellent execution by our teams”

— Chuck Robbins, Chair and CEO of Cisco

“In Q4, we delivered record revenue, non-GAAP operating income and EPS, all exceeding the high end of our guidance ranges and demonstrating strong financial discipline and operating leverage”

— Mark Patterson, CFO of Cisco

Outlook excerpt: “Our Q1 FY 2027 guidance assumes an effective tax provision rate of approximately 15% for GAAP and approximately 18.5% for non-GAAP results. Our FY 2027 guidance assumes an effective tax provision rate of approximately 14.5% for GAAP and approximately 18.5% for non-GAAP results.”

Competitors and their recent moves

Notable filings by peers in the last 120 days (SEC Form 8-K items such as acquisitions, material agreements, restructurings, leadership changes and results).

  • Sep 17, 2026 · Salesforce
    Regulation FD disclosureThe Agentic Enterprise Opportunity Robin Washington President and Chief Operating and Financial Officer · 8-K
  • Sep 14, 2026 · Oracle
    Other material eventLarry Ellison Cancels His Plan to Sell Oracle Stock · 8-K
  • Sep 10, 2026 · Oracle
    Quarterly or annual resultsOther material eventOracle Announces Q1 Results Driven by Triple Digit Growth in Cloud Infrastructure Revenues · 8-K
  • Sep 10, 2026 · Adobe
    Quarterly or annual resultsAdobe Reports Record Q3 Results · 8-K
  • Sep 8, 2026 · Adobe
    Board or executive changeRegulation FD disclosureAdobe Announces Anil Chakravarthy to Become President and CEO · 8-K
  • Sep 4, 2026 · Salesforce
    Board or executive change · 8-K
  • Aug 26, 2026 · Salesforce
    Quarterly or annual resultsSalesforce Delivers Record Second Quarter Fiscal 2027 Results · 8-K
  • Aug 5, 2026 · Salesforce
    Board or executive change · 8-K
  • Jul 22, 2026 · ServiceNow
    Quarterly or annual resultsServiceNow Reports Second Quarter 2026 Financial Results · 8-K
  • Jul 22, 2026 · IBM
    Quarterly or annual resultsSegment Results for Second Quarter · 8-K

Analyst ratings

Consensus ratings and price targets from brokers are licensed data. We do not republish them. You can compare our model with the analyst consensus at these public sources:

External links; we are not responsible for their content.

Disclosure (MAR Art. 20)

Producer
NyxAI GmbH, Reiterkasernstraße 2a, 85049 Ingolstadt, Germany · responsible: Lars Heppert · Legal notice
Model completed
2026-09-25 14:19 UTC (automated daily run)
First published / last updated
2026-09-25 14:11 UTC / 2026-09-25 14:19 UTC
Prices used
Last regular-session trade on IEX on 2026-09-24 at 19:59:59 UTC: $106.95. This is not the official closing price of the primary exchange.
Financial data
SEC Form 10-K, period 2026-07-25, filed 2026-09-02; balance sheet date 2026-07-25
Methodology
How the model works · steps 1–8 above
Main assumptions
rf 4.79% · ERP 4.14% · β 0.93 · WACC 8.38% → 8.93% · growth 7.7% → 4.79% · target margin 24.6% · sales/capital 5.14 · ROICterm 25.5% · scenarios: step 7, sensitivity: step 8
Nature of this information
Model-based estimate (base-case model value with a bear–bull range), computed automatically from public data with a fixed method. Not investment advice, not a recommendation to buy, sell or hold, not a price target, no investment horizon. The result depends heavily on the assumptions. Reported facts, market data, assumptions and model outputs are labelled above.
Conflicts of interest
Neither NyxAI GmbH (producer) nor its affiliated companies nor the responsible person hold positions in CISCO SYSTEMS, INC..NyxAI GmbH receives no payment from the companies covered for these pages, and they had no influence on content or results. Disclosures (as of Sep 25, 2026).

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