* Note: Prices are in Million (M) USD.
Description:
Cisco Systems, Inc. is an American multinational technology conglomerate headquartered in San Jose, California, in the center of Silicon Valley. Cisco develops, manufactures and sells networking hardware, software, telecommunications equipment and other high-technology services and products. Through its numerous acquired subsidiaries, such as OpenDNS, Webex, Jabber and Jasper, Cisco specializes in specific tech markets, such as the Internet of Things (IoT), domain security and energy management. On January 25, 2021, Cisco reincorporated in Delaware.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $8,161 M
Debt : $29,279 M
EBITDA : $15,139 M
Net Debt (Debt - Cash): $21,118 M
Since Net Debt is covered by EBITDA within 2 years, 2 points assigned.
This criteria used industry in which company operates:
Sector: Technology
Industry: Communication equipment
Based on sector, 5 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 16.57
Since Forward PE Ratio is between 15 - 20, 3 points assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 20 overlapping fiscal years (max 20).Average Free Cash Flow: $11,481 M
Average Revenue: $44,903 M
Revenue Converted To Free Cash Flow (%): 25.6%
Since Free Cash Flow (FCF) to Revenue percentage is greater than 25, 5 points assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-07-31): $53,803 M
Revenue 4 Years Ago (2020-07-31): $49,301 M
Last 5 Years Average Revenue Growth: 2%
Since Revenue Growth is between 0 - 5, 1 point assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-07-31): $4,062 M
Share Count 5 Years Ago (2020-07-31): $4,254 M
Company is buying back its own shares, 3 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $4.35
Trailing 12-Month Earnings Per Share (EPS): $4.03
Average Earnings Per Share (EPS): $4.19
Dividend Per Share (DPS): $2
Payout Ratio: 38%
Dividend Yield: 2%
Since company Payout Ratio is less than 50, 2 points assigned.
Since Dividend Yield is greater than 2, 2 points assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 20 valid ROE years (max 20).Average ROE: 20.3%
Since Average ROE is greater than 20, 5 points assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $69
52-Week Low: $43
Threshold Price (15% Above 52-Week Low): $50
Since Current price is not within 15% threshold, 0 point assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $276,804 M
Since Market Cap is between 100B - 500B, 3 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 4% exposure of Total Portfolio.
Value-Trade has assigned 31 points to above Cisco Systems Inc (CSCO) stock.
Last 20 Years Avg PE 15.06, Fair Value PE 25, Industry Based PE 16, Growth Based PE 1, RCFC Based PE 30.46, ROE Based PE 26.23, Risk-Free Anchored PE (25% MoS) 17.08. Based on these 7 values, average assigned is 18.69. Value-Trades has assined P/E value 18.69. Since an average (Current Year EPS + Next Year EPS) earning per share is $4.19.
The fair value of Cisco Systems Inc (CSCO) stock should be (18.69 x $4.19) = $78.31.
